Clucking in a chicken coop
LINDA ENSOR | 2017-03-24 07:18:45.0
Department of Trade and Industry deputy director-general Garth Strachan singled out high input costs in the industry, especially for maize and soya, used as chicken feed. These made up 65%-70% of total costs. File photo
Image by: Supplied
Is dumping by the EU to blame for the crisis in South Africa’s poultry industry?
That was the question at the centre of heated debate in parliament yesterday.
The SA Poultry Association says dumping is clearly to blame for a declining industry.
But the Association of Meat Importers and Exporters blames poor business models and a lack of competitiveness – and not enough emphasis on exports.
The two associations made presentations to parliament’s trade and industry committee yesterday.
A provisional “safeguard duty” of 13.9% was imposed late in 2016 on bone-in chicken portions from the EU and the International Trade Administration Commission is investigating whether it should be increased. The commission is expected to submit recommendations to Trade and Industry Minister Rob Davies by the end of May.
The government has accepted that the industry is in crisis and that further action is needed.
Meat association adviser Donald Mackay blamed the industry’s lack of competitiveness for its troubles.
Poultry association CEO Kevin Lovell proposed that imports be reduced by at least half. Imports would then be the third-largest source of chicken products on the local market. He noted that, of the chicken consumed in South Africa, 26% was imported and 45% of that was bone-in portions.
Of this, EU imports make up 81%.
Lovell estimated that every 10000t of poultry meat imported put 1069 direct and indirect jobs at risk.
Department of Trade and Industry deputy director-general Garth Strachan singled out high input costs in the industry, especially for maize and soya, used as chicken feed. These made up 65%-70% of total costs.
The problem has been exacerbated by the drought, which has brought about a sharp rise in prices. The high price of electricity was also cited as a factor.
He said South Africa could produce whole chickens cheaper than most EU countries and the US.
“Measures are required to protect the industry from unfair competition, but it is important that they do not lead to big consumer price increases.”