Imports, Tariffs and the Threat to the South African Poultry Industry

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Imports, Tariffs and the Treat to the South African Poultry Industry

Brazil and the European Union have become a major threat to the South African chicken industry, which is also an enormous threat to South Africa’s grain industry. Poultry farming in the Southern African region is a major employer and a significant contributor to the local economy and even food security.

The Increase of Poultry Imports

Since 2013, Brazil has been a major chicken product exporter to the United States. Even in South Africa, there has been an increase in the number of chickens imported from Brazil in recent years.

SA Revenue Service Statistics show that in 2017, South Africa imported 524 000 tonnes of chicken, worth R5.9 billion In 2018, imports of poultry totaled 539 000 tons worth more than R6 billion. In both years, over 60% came from Brazil, which is the largest exporter of chicken meat in the world.

South African Poultry Consumption

South Africans consume 25 million chickens per week. South Africa produces 19 million every week, and imports the remaining 6 million chickens from other countries.

Imports account for nearly a quarter of local consumption and exceed the output of any local chicken farm.

South African imports rose to 30% of the local market (including mechanically deboned meat or MDM) and 20% (excluding MDM). This resulted from the predatory onslaught led by the European Union and followed by Brazil, after EU imports declined due to bird flu bans.

In 2018, South Africa imported 566 000 tonnes of chicken for a cost that totaled R6.1 billion. Imports in 2019 were 5.5% higher than the five-year average from 2013 to 2017.

South Africa could and should produce this poultry, instead large amounts are imported at a substantial cost. This is primarily due to the high cost of poultry production in South Africa’s facilities, which means it cannot compete with cheaper imports from other countries. Locally, production is being squeezed and jobs are being lost instead of created.

South Africa’s cheapest and most popular form of animal protein, chicken is in high demand. Despite increased demand, local producers are being harmed by imports that are grabbing local market share.

You might be interested in: How To Get The Best Quality South African Chicken

Poultry Tariffs

Poultry Tariffs

The South African Poultry Association applied for an 82% ad valorem import tariff on bone-in and boneless frozen chicken products from many non-EU countries, including Brazil.

The Government approved protection measures against all EU members in 2018. The tariffs will be reduced from 35.3% to 30% in March 2019, 25% in March 2020 and 15% in March 2021. In March 2022, the tariff completely disappears.

In 2020, the South African government increased tariffs of 62% for frozen bone-in chicken portions (up from 37%) and 42% for frozen boneless portions (up from 12%). These tariffs apply to countries that aren’t part of the EU, like Brazil, the US and Argentina.

The South African government has enacted legislation to prohibit the import of chicken into their country in recognition of the predatory and unfair trade practices.

Imports declined last year because of new tariffs, increased infections from Covid-19, and currency changes. The importation of European chicken to South Africa is on the rise as exports recover.

With this in mind, we need tariffs to protect the poultry industry and South African jobs and create local food security.

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