Good year ahead
Chickens have been in the news again with Julius Malema suggesting a 50% import tariff. But that’ll never fly. Astral has also been cautioning that the proposed cuts by Eskom on non-paying municipalities will hit it hard. While it pays for its electricity on time, the municipalities are not paying Eskom. Power cuts will hit this company in some operational areas but both these stories are just noise, and Astral has started the new year trading up at 52-week highs. The real story here is that the chicken producers should have a better 2017 as returning rains will see maize prices going down, which means costs will be lower for them. My preferred pick in the space is Quantum Foods or Astral.