State lowers duties on chicken imports
The government has come under fire from domestic poultry producers for its decision to reduce duties on targeted frozen poultry imports.
Poultry producers said after the notice was published in the Government Gazette on Friday that the move to introduce rebates on imported chicken will harm the local industry.
The department of trade, industry & competition, led by minister Ebrahim Patel, has offered a 30% rebate on boneless chicken cuts, as well as a 25% rebate on bone-in cuts, according to the government notice published on Friday.
In October, Patel asked for an urgent investigation of the possibility of a temporary tax rebate on imported chicken after broiler breeders were culled in the wake of the avian influenza outbreak, raising concern about the potential reduction in festive season supplies of newly hatched chickens.
But the SA Poultry Association (SAPA), which represents poultry producers, said on Friday the industry imported broiler hatching eggs to fill any gap in supply over the festive season and had other contingency plans in place.
About 7.5-million chickens have been culled since April 2023, according to the industry body.
Unlike in other countries overseas, local farmers are not compensated for the costs.
The proposed rebate on imported chicken comes with domestic producers still in the early stages of recovery after they were hit by the worst power crisis on record in 2023, as well as avian flu and relatively high grain prices.
“It’s not great news for the sector. There is no shortage of product in the domestic marketplace. In fact, we have a bit of inventory build-up because the Christmas period was not great for the sector,” said Anthony Clark, small-to-medium cap analyst at Smalltalkdaily Research.
In the past year, top SA poultry producer Astral Foods had its first loss since listing on the JSE in more than two decades as rolling power outages and decaying municipal infrastructure added to high production costs.
Astral competes with Quantum Foods and RCL Foods’ Rainbow Chicken, along with other privately owned players.
The SAPA said the implementation of the tariff rebates was antithetical to trade measures implemented under the poultry sector master plan — and against which the local industry players made huge investments in production capacity.
“They will only serve to place further investment at risk, place jobs at risk and threaten SA’s food security.
“The implementation of a rebate and any permits issued under this will be the single most damaging action to a poultry industry already on its knees,” the SAPA said in a statement.
However, the Association of Meat Importers and Exporters of Southern Africa welcomed the move, saying it will keep the price of chicken in check for consumers, especially poor households struggling to afford this vital source of protein.