Bad news for South Africans who love chicken

Hume International managing director Fred Hume said irrational import bans on poultry lead to South Africans paying far more for their favourite protein than necessary.

Hume pointed out that the cost, insurance, and freight (CIF) price of one kilogram of mechanically deboned meat (MDM) is currently around R9.46 in the Philippines. 

MDM is a key ingredient in producing processed meats such as viennas, sausages, and polonies, which are staples of many local diets.

However, in South Africa, this cost is around R17.20/kg – nearly double. Hume said the reason for this is “grossly inconsistent trade practices and irrational import regulations”. 

“Local poultry producers simply do not produce MDM in any meaningful quantity, leaving the overwhelming majority of manufacturers dependent on imports to fill the gap,” he said. 

“But regulatory hurdles and irrational protocols unnecessarily inflate costs, with the result that South Africa pays nearly double for these products if compared to countries like the Philippines.”

Hume pointed out that South Africa imports around 18,000 tonnes of MDM per month. 

However, the latest statistics show that the price of MDM leapt roughly 50% between February and July alone, as trading partners in Brazil implemented increasingly strict measures to meet the country’s rigid import standards.

These standards carry severe cost implications, which are eventually passed down to the consumer through higher prices.

For example, South Africa’s stringent salmonella standards for raw poultry are unnecessary and drive up prices, as they do not account for the role of heat treatment, a widely accepted method globally, which effectively eliminates pathogens. 

South Africa’s inconsistent approach to heat treatment creates uncertainty for businesses and consumers and calls for standardized, transparent protocols to streamline imports and stabilize prices.

“Like the regulations already in place for the import of pork, poultry importers require a set of clear-cut, transparent, consistent, standardised protocols for heat treatment to better manage supply chains and stabilise prices,” he said.

Another issue Hume pointed out with current trade practices is South Africa’s inconsistent and irrational approach to regionalisation. 

For example, Agriculture Minister John Steenhuisen recently signed a critical trade agreement with China. 

This agreement will boost South Africa’s beef exports by allowing regionalisation or compartmentalisation in the event of any Foot and Mouth disease (FMD) outbreaks. 

This will ensure that only affected provinces will be restricted while beef exports continue from other areas.

“In other words, we are enjoying the benefits of regionalisation in terms of beef, so why not extend this same courtesy to our poultry trade partners in the case of bird flu or Newcastle disease rather than applying blanket bans and jeopardising supplies?” Hume asked. 

“Ultimately, it’s time to implement regionalisation protocols to prevent unnecessary import bans and heat treatment protocols to ensure food safety at a lower cost.” 

Hume said fair trade practices benefit everyone – consumers, businesses, and even local producers. 

“Given that chicken remains one of South Africa’s most popular and most affordable proteins, we deserve smarter regulations that serve the entire country’s best interests,” he said.

High food prices

Hume’s comments come shortly after the Competition Commission released a new report on South Africa’s unnecessarily high food prices.

The report found that South African food producers and retailers have been slow to pass on the effects of declining cost pressures to cash-strapped consumers, an issue that may warrant further investigation.

The commission said cost pressures in South Africa are easing due to an end to load-shedding, a stronger rand, and declining fuel costs.

However, essential food prices are still high and increasing at a rate that is unaffordable for low-income households in the country.

South Africa’s competition watchdog has been investigating unjustified food price increases since last year. 

The investigation began last year amidst high inflation and economic hardships. However, the commission noted that, despite a recent decline in food inflation, many South Africans still struggle to afford basic necessities.

The report further explained that retailers have generally kept prices below official inflation rates.

To remain competitive, they have focused on offering lower prices and adjusting their product mix based on consumer demand. 

However, the commission’s probe found some instances where prices have remained high, even as production costs have decreased. 

For example, the Competition Commission noted discrepancies between the production costs and retail prices for items like cooking oil, eggs, and brown bread.