Agriculture in 2013: Poultry – an industry in distress

At the beginning of the year, the SA Poultry Association (Sapa) was disappointed with the Department of Trade and Industry’s (DTI’s) decision not to impose definitive anti-dumping duties on cheap poultry imports from Brazil.

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At present, the industry is anything but viable as a consequence of the unbridled imports and massive dumping that’s taking place,” said Sapa CEO Kevin Lovell in the Farmer’s Weekly of 1 February.

It was reported on 19 April that the department of agriculture was reviewing the Agricultural Product Standards Act of 1990 and proposed limiting the brine content of chicken to between 4% and 8% of mass, down from the current levels of up to 30%. By May, it was reported that the 21% increase in the cost of poultry feed had knocked R300 million off the bottom line of integrated poultry producer Astral Foods.

This led to the group recording its worst trading performance since listing in 2001. Meanwhile, Sapa applied to the International Trade Administration Commission (Itac) for higher tariffs on all frozen chicken meat, other than mechanically deboned meat.

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In June the Association of Meat Importers and Exporters (Amie), cited Sapa’s use of an outdated business model as the reason local producers were losing money. David Wolpert, CEO of Amie, said it was a myth that there had been a “flood of cheap chicken imports” during the past few years. On 5 July, Farmer’s Weekly reported that the DA called on the Competition Commission to investigate the local poultry sector because of the ongoing price war between local producers and importers.

The Competition Commission meanwhile announced that it was considering an investigation into the sector
between 2014 and 2018. At the beginning of October, the long-awaited poultry tariffs were reported. The new tariff on bone-in portions is 37%, on boneless products 12% and on whole birds 82%. Duties on carcasses were raised by 4%,
and on offal by 3%.