Shortage of poultry products will continue into the new year, warns meat importers’ association
The Association of Meat Importers and Exporters says permits take time to issue and even if they are expedited, it still takes weeks for imports to arrive on our shores.
A temporary rebate on import duties for chicken and poultry products is a good move for food security in South Africa, but if the International Trade Administration Commission (Itac) does not make a decision soon, consumers will see high prices and supply issues well into the new year, warns the Association of Meat Importers and Exporters (Amie).
The association welcomed the Department of Trade and Industry’s (DTIC) directive that Itac create a temporary rebate on poultry imports, although it says that the 12-month rebate does not go far enough as avian influenza is now a regular occurrence and the country needs to secure food supply.
It believes that Itac should also develop a responsive and agile rebate permit mechanism that can be activated quickly when needed, without lengthy time-consuming processes and delays, to prevent future crises in the supply chain.
Amie warned since February 2023 that South Africa was at risk if and when the highly pathogenic avian flu (HPAI) reached our shores because the local poultry supply was inadequate and import duties were too onerous.
In April, Fred Hume of Hume International, a meat wholesaler in Gqeberha, called for the government to act on HPAI before it was too late:
“Beyond implementing effective heat treatment protocols, we are appealing to government to enact a similar policy with regards to Brazil as it does with [the US], and only ban imports from individual states impacted by bird flu, as opposed to a blanket countrywide ban.”
He said the agriculture department had to be proactive by reinstating import permits for countries that had been declared free of bird flu because, in some cases, countries remained banned for years after having eradicated the disease.
The association has now filed its proposal to Itac for the 12-month rebate, asking that Itac reduce the import duties on frozen bone-in chicken from 62% to 37%, boneless chicken from 42% to 12%, and to zero-rate chicken offal (carcasses, feet, heads and livers), which were relied on by low-income households. Those duties were raised in March 2020 to protect the local industry.
Paul Matthew, CEO of Amie, says the focus has been on protecting local producers from dumping, and now that the country has a problem with HPAI, there is a shortage of poultry products in South Africa.
“Because of all the tariffs that have been applied to the importers, we haven’t been bringing a lot of product in because it’s just too expensive for us. The local producers are culling… they’re going to have to go into quarantine and we’re going to have a big problem from mid-November.”
On 3 October, the DTIC directed Itac to institute a temporary rebate on anti-dumping duties on imports of chicken meat and edible offal of fresh, chilled or frozen chicken from Brazil, Denmark, Ireland, Poland and Spain to offset shortages of local chicken.
The call for a temporary rebate comes just two months after Itac reinstated the duties to protect local chicken producers from dumping.
Agriculture Minister Thoko Didiza has met retailers to discuss the government’s efforts to contain the outbreak and wants to expedite import permits for poultry products, but Matthew says that process is likely to take months.
‘Nothing but lip service’
“What Didiza said last week is nothing but lip service. There is no quick fix. The permit office used to take anything from between five to 10 days to process. Now it takes anything from five to 30 days to process. The importers, once they get the permit, then place the order. That can take six weeks to arrive in South Africa.”
Poultry imports are unlikely to reach our shores before Christmas – or even late January, he warns.
Amie has also asked Itac to extend the rebate to shipments already on the water to ensure immediate access to more affordable poultry products.
Matthew says the current HPAI outbreak has already caused a 16% reduction in domestic production in 2023/24, which will escalate to 847,000 tons.
“Given the long-lasting impact of HPAI and the likelihood of its recurrence, South Africa’s options for supplementing shortages will be severely limited without a temporary rebate on the ordinary customs duty.”
On 8 October, the SA Poultry Association (Sapa) announced that five million birds have been culled so far this year, which is 20% of the country’s commercial layer flock, while 2.5 million of the national broiler breeder population have been culled.
In August, in response to Minister Ebrahim Patel’s announcement that the DTIC had decided to suspend anti-dumping duties against Brazil, Denmark, Ireland, Poland and Spain for 12 months, Sapa said the local poultry industry was sensitive to the plight of cash-strapped consumers and that it would hurt job creation, put the local industry at great risk and potentially even destroy it.
“The decision will not assist the country’s efforts towards localisation, job creation, transformation plans, investment or developing the rural economy. In fact, it may actively cause harm and will certainly disrupt industry investment plans for the foreseeable future.
“Rising food prices in South Africa (and globally) are being driven by global
fundamentals in the soft commodity markets (most notably high Brent crude oil prices, demand on corn for ethanol production in the US, global weather phenomena, global supply and demand dynamics, and more importantly, Russia’s war in Ukraine that has led to lower levels of production in Ukraine and the inability for that country to export their crops – negatively impacting global coarse grain prices).”
He said Sapa believed the announcement merely provided the importers a reprieve for 12 months, and that any “cheap” chicken imports simply go into the pockets of the importers. DM