HomeAgri NewsImport rebate could lead to chicken oversupply 

Import rebate could lead to chicken oversupply 

Estimated reading time: 4 minutes

The Southern African Poultry Association (SAPA) has expressed apprehension regarding the International Trade Administration Commission of South Africa’s (ITAC) recommendation to the minister of Trade, Industry and Competition, Ebrahim Patel, to implement certain rebates for frozen poultry imports. SAPA is concerned that these rebates might lead to a short-term oversupply in poultry meat, which can have a devastating long-term effect on the industry. 

Izaak Breitenbach, CEO of SAPA’s broiler division, told AgriOrbit that ITAC’s reasoning was unclear and that such rebates would be unnecessary, unjustified and damaging to the domestic poultry industry. “Although the industry is recovering from the worst avian influenza outbreak in the country’s history, neither poultry producers nor industry analysts are expecting any shortages now that the threat has abated.” 

Click here to read more about poultry imports.

Resolving solved problems 

In 2023, South Africa was hard hit by an outbreak of highly pathogenic avian influenza (HPAI), which resulted in the unfortunate loss of roughly 9,5 million chickens. The most recent episode of this outbreak occurred in November 2023, and, according to Breitenbach, the situation has been effectively contained and resolved.

However, the industry soon realised that HPAI would lead to shortages and solutions were implemented in 2023 to curb possible shortages. “An excess of 160 million hatching eggs were imported to cover potential meat shortages due to HPAI. Therefore, the private sector already made provisions,” Breitenbach said.  

Despite this, ITAC calculated that the market will experience a shortage of 172 000 tons during 2024. Furthermore, 65 import permits have already been issued to allow importers to claim rebates on their orders. “Some of these rebates will apply to bone-in chicken, effectively negating the hard-fought anti-dumping duties agreed to in the Poultry Sector Master Plan and countering the master plan’s objective of curbing chicken imports.” 

“It is quite ironic – ITAC is the institution that calculated the material harm done to the local industry because of dumped poultry product, yet it has approved 65 permits, some of which will enable importers to purchase dumped product,” Breitenbach said. He added that these permits were valid from 26 January to 27 April 2024, and the import quota for the first quarter was 43 000 tons.  

No shortage in years 

Breitenbach pointed out that in 2023 SAPA guaranteed South Africa that it would not experience any shortages over the festive season, and it didn’t. “The association and its members are confident in its calculations and its approach in supplying South Africa with chicken, as the last reported shortages were over three years ago. Capacity has grown significantly in the past five years due to the industry’s investments of more than R2,1 billion. This created thousands of jobs and bolstered South Africa’s food security status in the process.” 

Governmental ‘help’ hampers industry 

While ITAC aimed to ensure stable poultry supply through these rebates, their impact could have the opposite effect. “The only thing they will achieve is taking sales volumes away from the local industry, which has been supplying cheap chicken to South Africans for a very long time.”   

Breitenbach said these rebate permits were undoing that hard work. “They are designed to encourage additional chicken imports when the country does not need them. They will cause further harm to the South African poultry industry, which is experiencing many challenges already. The industry is recovering from the HPAI outbreaks with no aid from the government. Despite the Animal Disease Control Act, 1984 (Act 35 of 1984) stipulating that producers will be compensated for following the law by culling sick birds, no producer has received a cent in recompense.” 

“Moreover, deputy president of South Africa, Paul Mashatile, announced a relief fund for the poultry industry at the National Council of Provinces in October 2023. This promise of aid has not materialised, and the poultry industry must yet again look inward for assistance and support.” The rebates will further imperil small-scale producers struggling to get back on their feet while padding the profit margins for importers to address a problem that does not exist.  

“SAPA recently conveyed its research and findings on the current chicken supply to the Department of Agriculture, Land Reform and Rural Development (DALRRD), advising that there is currently no shortage of chicken in the local market. The DALRRD should have confirmed the ITAC calculations on shortages if ITAC is issuing rebate permits. It is confusing and damaging to the poultry industry and greatly undermining the work of the master plan,” Breitenbach concluded. – Susan Marais, Plaas Media

Must Read

Nampo Kaap bou op die geskiedenis

Estimated reading time: 6 minutes Nampo Kaap word vanjaar van 11 tot 14 September by Bredasdorp aangebied. Die geleentheid is bekendgestel by ’n mediageleentheid by...