Collapse of Agoa deal could spell a catastrophic rise in poultry prices

A threat to exclude South Africa from the African Growth and Opportunity Act (Agoa) trade agreement with the US could put in jeopardy the local poultry industry.

Chicken supply and its crucial import industry are already in a tenuous position because of the global bird flu outbreak, and the looming threat of expulsion of South Africa from Agoa. If this were to happen, this would push the industry over the edge, risking sharp increases in local chicken prices.

This demonstrates the importance of the white meat to local tables. South Africans expend a total 1.8-million tonnes of chicken each year, or an average of 33kg per person.

This represents close to 60% of all meat consumed in the country, making chicken one of South Africa’s most important proteins and staple foods.

Experts have warned that the US legislators’ recent request to move the upcoming Agoa Summit out of South Africa was a hint that the country could possibly be excluded from the agreement before it reaches its next renewal date of 2025 – an event that could prove catastrophic, some experts have warned.

Roy Thomas, logistics and operations director of major foods importer Hume International, said: “The effect of South Africa’s expulsion from Agoa on local poultry prices would be immense, and the situation is far more dire than many realise.”

South Africa receives close to 70% of its chicken imports from Brazil The country was hit by bird flu in May and declared a state of animal health emergency for 180 days.

“If America pulls us from the Agoa agreement, imports from our second largest poultry importer may also become too expensive for local businesses and consumers to bear.”

Thomas speculates there would not necessarily be an observable chicken shortage in South Africa, but rather that prices would outpace most South Africans’ wages.

“Under Agoa, South Africa is exempt from a R9.40 per kilogram of chicken anti-dumping duty for imports from America. A price increase of this magnitude is sure to severely affect local chicken prices.

“The trouble with shortfalls in import supplies is that the local market may lose its ability to regulate the price of locally produced chicken against that of international producers, potentially seeing local producers boost their prices. The government should not underestimate the importance of Agoa.”

The government is expected to send top officials to the US led by the minister of trade, industry and competition, Ebrahim Patel.

The relationship between South Africa and US reached a low with SA being accused of having used a Russian ship, Lady R, to transport weapons to Russia.

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