A CHICKEN RUN

Finweek English Edition - - INVESTMENT -

Chicken stocks have been hav­ing a run lately. In the last six months we’ve seen As­tral up by 15%, Sov­er­eign Foods gain­ing some 28% and Coun­try Bird al­most 20% higher. There are a few driv­ers here, with re­ports that the in­dus­try could get a 40% im­port duty against cer­tain EU coun­tries ac­cused of dump­ing, but also a maize price that has been mov­ing lower. Maize is a ma­jor cost in­put in the poul­try mar­ket. As­tral also has a feed oper­a­tion, and the other pro­duc­ers cer­tainly ben­e­fit from lower prices. The ben­e­fits are likely still com­ing, and any con­fir­ma­tion re­gard­ing the po­ten­tial 40% im­port duty would help the prices even fur­ther. The in­dus­try i is still in a tough sp space, but is start­ing to look in­ter­est­ing f for cycli­cal in­vestors in­vestors. the com­mod­ity) chang­ing, which ul­ti­mately brings even more risk to the project. The bot­tom line is that most of these min­ers never deliver on their mas­sive prom­ises. It is an in­vest­ing space I stay away from.

Ste­fan Joselowitz

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