Chicken imports soon to own biggest share of SA market

Imports of chicken meat are continuing at a rapid pace and look set to hit record highs by the end of the year.

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Imports of chicken meat are continuing at a rapid pace and look set to hit record highs by the end of the year. Chicken meat imports from January to July 2011 totalled 181 554t, and if this pattern continues, they will reach an estimated 311 235t by the end of December.

“If we reach this level, imports will be the single biggest supplier to the South African market,” said Southern African Poultry Association chief executive Kevin Lovell.

“That has never happened before. It is guaranteed that 2011 will see the highest imports ever. It is just a question of whether imports will be more than Rainbow Chicken’s production. Imports will certainly be more than the production of Astral Foods.”

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Rainbow Chicken is South Africa’s largest producer of chickens, slaughtering 4,4 million birds a week, followed by Astral Foods at 4,2 million. In 2010, South Africa imported 240 182t at a value of R1,53 billion, making it the world’s 13th largest chicken meat importer.

Brazil, Argentina and Canada were the top three sources, accounting for 75%, 10% and 7% respectively, according to TradeProbe (a joint publication by the National Agricultural Marketing Council and the Department of Agriculture, Forestry and Fisheries).

Astral Foods CEO Chris Schutte said imports are equal to a third of local production. “Of all chicken consumed in SA, 25% is imported. Imports are hurting us badly.” Schutte said although per capita consumption had increased from 31kg in 2009 to 33kg in 2010, it was not a natural increase.

“The market has grown at the cost of margin. Poultry prices have lagged behind general food inflation. If chicken is much cheaper than other food sources, the per capita consumption will go up.” Schutte said poultry producers were currently very close to, or below, break-even. “The industry is stagnating because of poor margins because imports are applying downward pressure on prices. On the input side, maize is at a record high of R2 300/t.”

Lovell said even if half the imports were produced locally, it could create in excess of 10 000 jobs in the poultry and feed industries. High exports are because of international trade dynamics and an open agricultural trade policy in SA.

“SA can more than double its current level of import protection. We are allowed to have import protection up to 80% of the imported value and still fall within the limits of the World Trade Organisation agreement, but we generally apply 27% or less,” Lovell said.

He said the Department of Trade and Industry’s International Trade Administration Commission’s anti-dumping investigation against Brazil for imports of whole birds and boneless cuts is still in progress. – Robyn Joubert