Business Maverick

POULTRY PROBLEM

Avian flu sees four million chickens destroyed, raising egg conundrum for SA consumers

Avian flu sees four million chickens destroyed, raising egg conundrum for SA consumers

Avian flu has triggered an egg shortage in South Africa — and some industry players have raised concerns about supplies of chicken meat.

Bird flu came first, and the result for South African consumers is a chicken-and-egg conundrum.

As we reported earlier this week, major retailers, including Spar, have flagged a shortage of eggs linked to outbreaks of avian flu.

Read more in Daily Maverick: South African retailers warn of looming egg shortages linked to nationwide avian flu outbreak

There are also concerns about the chicken-meat supply chain, and the price of poultry-based protein remains on the boil at a time when food and wider consumer inflation rates in South Africa have been cooling. 

According to the latest monthly Household Affordability Index compiled by the Pietermaritzburg Economic Justice and Dignity Group, the price of frozen chicken portions rose during August by 3%.

South African consumer inflation slowed to a two-year low of 4.7% on an annual basis in July, but Statistics South Africa noted that the price increase for eggs, milk and cheese accelerated to 14.4% from 14.1% in June.

Dr Abongile Balarane, the CEO of the South African Poultry Association, said this week in an interview with Daily Maverick that the situation was “catastrophic”, but that the egg crunch should ease by October.  

Balarane said the earlier cases of the H5N1 strain of the Highly Pathogenic Avian Influenza (HPAI), detected at the end of April on farms outside Paarl in the Western Cape, were the same strain as that spreading internationally. 

The new strain – first detected in June – has been identified as H7N6 and found in Mpumalanga, Gauteng and the Free State.

“It’s been catastrophic. We’ve lost about 15% of national production, which is more than four million chickens.”

No vax for chickens

South Africa does not yet vaccinate chickens, but the Poultry Association is hoping this will change in the new year. The industry was in ongoing talks with the government about vaccines. 

In South Africa, HPAI is a notifiable disease. If it is suspected, producers need to notify their veterinarian, who then notifies the state vet. The farm is then put into quarantine. If it is confirmed, the chickens, eggs, feed and manure need to be destroyed. 

“The long-term solution for us is to start vaccinating, like Mexico,” Balarane said. 

On the layer side, the impact has been devastating, but on the upside, the virus is only likely to remain an issue until late September or early October, he said. 

“After that, we are hoping farmers can start to restock their farms in preparation for the festive season. As an industry, we’ll definitely do whatever it takes in order for South Africans to enjoy one of our most affordable sources of protein, which is eggs,” Balarane said.

“What we need to do is take care of our local (consumers), so we’re reducing our exports to neighbouring countries. We are giving priority to local demand. Fortunately, around October we’ll be able to quickly restock among those affected farms, which will require a lot of finance, but we are hoping that it will go according to plan.”

Retailer Woolworths said its precautions included bringing its free-range laying hens into the barn.

“Avian flu can spread in various ways, and veterinary experts have advised our farmers to keep our free-range hens indoors temporarily to protect their health and welfare, which they have done, as animal welfare is our priority,” the company said in an emailed response to Daily Maverick’s queries.

“In Gauteng, Free State and KwaZulu-Natal (where hens have been protected indoors for some time), these eggs are labelled as ‘barn eggs from free-range hens’ until the risk has passed and our hens are free to roam again.” 

Some in the industry warn that supply constraints remain in the pipeline, including for chicken. 

“South Africans should brace for a chickenless festive season this year as multiple industry issues come to a head,” said Fred Hume, managing director of Hume International – one of the largest importers of frozen food products in South Africa – in a commentary this week.

Hume pointed to factors such as the avian flu outbreaks as well as tariffs and anti-dumping duties, notably regarding imports from Brazil, the largest source of South African poultry imports. As a major importer of frozen food products, it must be noted that Hume International has some skin in this game.

But chicken importers have not been the only critics of such policies, which always trigger a flap between importers and local producers.

In its monetary policy review in October last year, the South African Reserve Bank examined the inflationary impact of the imposition of tariffs on frozen chicken imports. It found that they had a significant inflationary effect.

“Customs duties on frozen whole chicken and bone-in pieces have… contributed to the rising prices of frozen chicken meat and declining imports, with the effects exacerbated by anti-dumping duties,” it said.

Read more in Daily Maverick: South African Reserve Bank takes dim view of poultry tariffs that harm the poor

The Department of Trade and Industry in August reimposed anti-dumping duties on frozen bone-in portions of chicken originating in or imported from Brazil and other countries.

Read more here: Poultry anti-dumping duties reimposed on imports of frozen bone-in portions

South Africa does not produce enough poultry to meet domestic demand, which is why it requires chicken imports. 

With avian flu thrown into the mix, consumers should brace for potential shortages and price increases. That does not mean there will be no eggs this festive season or chicken for the braai. But price inflation for such products looks set to heat up. DM

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