SA sus­pends Brazil­lian meat im­ports Down­grade bad news for agribusi­ness Mozam­bique bans chicken im­ports

The Poultry Bulletin - - CONTENTS -

SA sus­pends Brazil­ian meat im­ports

In line with the po­si­tion taken by many coun­tries around the world, South Africa has sus­pended im­ports of meat from Brazil. Two of the largest meat com­pa­nies in Brazil that have been im­pli­cated in the cor­rup­tion scan­dal in­volv­ing un­safe meat cer­ti­fied fit for ex­port - Seara Ali­men­tos and BRF - both ex­port chicken meat to South Africa in the form of MDM or me­chan­i­cally deboned meat, which is used in sausages or polony.

An in­ves­ti­ga­tion by Brazil­ian author­i­ties found salmonel­latainted meat was ex­ported to Europe, as well as var­i­ous un­safe prac­tices rang­ing from the use of acid to hide the smell of rotten meat through to mix­ing pigs heads and card­board in sausages.¡

Down­grade bad news for agribusi­ness

The de­ci­sion by S&P to down­grade South Africa’s sov­er­eign debt to junk sta­tus is bad news for agribusi­ness and es­pe­cially for con­sumers.

This is the view of Dr John Pur­chase, CEO of Ag­biz, who said that the dra­matic po­lit­i­cal de­vel­op­ments of the past week, and the con­se­quen­tial and ex­pected down­grad­ing of South Africa’s in­vest­ment grade to so-called junk sta­tus by the rat­ing agency Stan­dard and Poor’s (S&P), is se­ri­ously bad news for the agri­cul­tural and agribusi­ness sec­tors of our coun­try’s econ­omy, and for food se­cu­rity.

“The im­me­di­ate na­ture of the down­grade fol­low­ing an emer­gency meet­ing of the rat­ing agency in­di­cates the se­ri­ous con­cern that S&P has with the changes, es­pe­cially at Na­tional Trea­sury, and the re­sult­ing im­pact on the eco­nomic and fis­cal sit­u­a­tion of the coun­try,” he said, adding that the re­sult­ing higher cost of cap­i­tal and a de­pre­ci­at­ing ex­change rate will im­pact neg­a­tively on in­vestor con­fi­dence and growth prospects of the coun­try in the medium to longer term.

Ham­let Hlomendlini, se­nior econ­o­mist at Agri SA, says the down­grade will hurt farm­ers in that the im­me­di­ate rise in in­fla­tion could have a neg­a­tive im­pact on the sec­tor’s com­pet­i­tive­ness as pro­duc­tion costs, es­pe­cially for the ex­port- ori­ented pro­duc­ers, will now be rel­a­tively higher lo­cally.

“The fu­ture im­me­di­ate out­look of South Africa is neg­a­tive, sug­gest­ing that any in­vestor that de­cides to in­vest in South Africa will be tak­ing a short-term risk by do­ing so be­cause they might not get the de­sired re­turn on their in­vest­ment,” says Hlomendlini. “In ad­di­tion, the down­grade will lead to a higher cost of credit for all bor­row­ers in South Africa. This will have a tremen­dous im­pact on many house­holds, es­pe­cially the poor and small busi­nesses, when it comes to ac­cess­ing loans from banks and/or ser­vic­ing their cur­rent debt. The lo­cal cur­rency is likely to de­pre­ci­ate fur­ther, and in­fla­tion might rise lead­ing to higher food and fuel prices.”¡

Mozam­bique bans chicken im­ports

The Brazil­ian meat scan­dal has led to the Mozam­bi­can gov­ern­ment ban­ning im­ported chick­ens, in­clud­ing those from South Africa.

Mozam­bique’s Na­tional Di­rec­tor of Trade, Zul­mira Ma­camo, says fol­low­ing the bribery scan­dal con­cern­ing meat safety stan­dards in Brazil, any chicken from that coun­try is sus­pect – in­clud­ing Brazil­ian im­ports into South Africa or Europe that have been repack­aged and re­la­beled for ex­port.

This move rep­re­sents a golden op­por­tu­nity for pro­duc­ers in Mozam­bique, who have long com­plained about the ef­fect that cheap im­ports have on the lo­cal mar­ket.

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