South Africa considers opening the floodgates amid chicken crisis

South Africa’s government is considering a temporary rebate on import duties for chicken, with poultry industry roleplayers mixed on whether this would help or harm the country’s industry.

The International Trade Administration Commission (ITAC) recently said that Trade, Industry and Competition Minister Ebrahim Patel is considering creating a temporary rebate provision on meat and edible offal, fresh, chilled or frozen fowls.

This comes amid an avian influenza (AI) outbreak that has ravaged the local poultry industry over the past few months, affecting most of the country’s provinces and leading to the culling of over 7 million chickens.

Association of Meat Importers and Exporters CEO Paul Matthew told CNBC Africa that his association has submitted a request to the Trade Ministry to grant a 12-month relief on general import duties for poultry.

He specified that this does not include anti-dumping or safeguard duties.

He said the country’s current general duty came into effect in March 2020, when it was increased from 37% for bone-in chicken to 62%.

Matthew requested that the minister take the duty back to 37% for 12 months while the local industry recovers.

“We feel that this is fair. We’ll be able to get products back into the country to support local producers while we’re infected with AI,” he said.

This will give local producers time to recover and replenish their stock and give consumers relief by keeping prices low and ensuring sufficient stock.

Matthew said this bird flu outbreak should allow the country to rethink the entire poultry industry since, even under regular circumstances, local producers cannot produce enough poultry to meet demand, and there will always be a need for imports.

“But over the past three years, imports have been cut right out – we are down 45% year-on-year in terms of trade with bone-in chicken,” he said.

There is a need to look at the issues affecting the industry now to ensure sufficient products for South African consumers.

“Diseases will not go away. What are our plans should we get an infection like AI? How do we combat it? How do we ensure food security?” he said.

“The days of always trying to oust the importers are over – that gap that we fill is needed because local producers cannot fill it.”

However, not everyone in the poultry industry shares Matthew’s views.

News24 recently reported that the South African Poultry Association (SAPA) said relaxing import duties could be the “final straw” for the local industry, which is already facing challenges like load-shedding. 

General manager of SAPA’s broiler division, Izaak Breitenbach, told the publication that the country’s poultry producers already had their “backs to the wall” and were reporting losses even before the bird flu outbreak.

He pointed to several local food producers, including Rainbow, Quantum and Astral, that have already published and said that combined, the total loss due to AI to date is half a billion rand.

“And that is for only three companies, so one can just imagine what it is for the total industry,” he told News24.

“We will see job losses, and we will see economic decline in this industry.”