The country is facing the possibility of a chickenless festive season this year due to a perfect storm of supply shortages and rapid price hikes.
Coupled with unfavourable import tariffs, this will inevitably lead to crippling price increases, lower supply availability and an alarming drop in consumption of protein, which is integral to the majority of South Africans.
Based on the challenges faced by the poultry industry, South Africa has lost more than 20% of the national chicken population, with 4-million chickens destroyed amid the South African avian flu epidemic, resulting in the loss of billions of rands in revenue.
These factors translate into a shortage in eggs and poultry meat supply.
The price surge can be attributed to several factors, including non-tariff trade barriers, anti-competitive, anti-dumping duties, and local supply challenges exacerbated by a bird flu epidemic.
Fred Hume, managing director of food distributing company Hume International said: “Unlike our neighbours in Namibia, South Africa has been dragging its feet in reopening poultry trade with certain countries such as Poland, Belgium, and Argentina, even though they have been declared bird flu-free. While Ireland has the green light, it is a smaller producer than Poland, Belgium or Argentina, raising the concern that trade permissions may currently be guided by political rather than phytosanitary motivations.”
He added: “The failure to reopen trade with these countries, even after they have been declared free of bird flu, serves as a significant non-tariff barrier to trade, further protecting local producers to the detriment of consumers, importers and local resellers.
“South Africa has implemented anti-dumping duties of a maximum of 265% for bone-in chicken imported from Brazil – South Africa’s largest source of imported chicken – in addition to the existing 62% import tariff.
“South Africa has further raised significant anti-dumping duties on chicken against Ireland, Poland, Spain and Denmark. Prior to the introduction of these duties, bone-in chicken from Poland, Spain and Denmark were duty free.”
Hume said these punitive tariffs have already disincentivised imports, which have historically served to enhance competition and keep prices low for consumers, while augmenting local supply in times of shortage.
Hume said that few international poultry producers want to trade with South Africa, while other markets offer them better prices and more beneficial trade terms, noting that this could spell out that the country has no Plan B in the event of a widespread bird flu epidemic decimating local supply.
“As such, we advocate for another temporary suspension of these harmful anti-dumping duties for a period of at least six months. During this time, the government should further reassess the appropriateness of the anti-dumping duties and include prominent importers in the conversation,” said Hume.
He urged the government to urgently reopen trade with Poland and Belgium and to update its poultry quarantine regulations to better align with those of other countries.
“Once countries have been declared free of bird flu by the relevant regulatory bodies, trade should be resumed promptly. Delayed action to resolve the three major issues plaguing local poultry supply will result in a significant shortfall accompanied by a striking price increase on the inevitably limited stock.”
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa.
