Imported US chicken welcomed in SA market

IMPORTS of American chicken, which resumed recently after an absence of nearly 17 years, are being well received by the market.

The US poultry industry only recently regained limited access to the South African poultry market under a limited tariff quota of 65 000 metric tons annually. The resumption of imports of bone-in products was achieved through a government-to-government agreement linked to the renewal of the trade benefits provided by the US to South Africa under the African Growth Opportunity Act (AGOA).

The first South African importers to take advantage of the poultry import opportunity said that wholesalers, retailers and consumers are receptive to US chicken.

The USA Poultry & Egg Export Council ( Usapeec) acknowledged that chicken imports have been the subject of debate in the South African market in recent months. Usapeec facilitates free market trade between US producers and South African business partners. The council points out that AGOA provides for enhanced trade between South Africa and the US that benefits producers in both countries.

AGOA covers more than 7 000 products, giving African and South African producers duty-free access to the US market, and at the same time giving US companies new opportunities for investment and partnerships in Africa. In addition to manufactured products, major South African agricultural exports under AGOA in recent years include citrus fruits and concentrated juices, tobacco, essential oil of lemon, vegetable seeds and wine.

“AGOA is boosting business and creating opportunities in Africa and the US,” says Usapeec’s Africa regional director, Zelda Sharp.

“We have seen claims of dumping and allegations that chicken imports are responsible for job losses in South Africa, but this is not accurate,” says Sharp. “Dumping is an anti-competitive practice that no reputable producer would be guilty of, and import quotas are too low to impact South African chicken producers.

In addition, imported chicken is subject to import tariffs designed to support South African poultry producers.”

Sharp notes that dumping does not mean the sale of inferior products. “Dumping is an anti-competitive practice in which products are sold to other markets at a lower price than they are produced and/or sold in the markets where they are produced,” she says.

“However, 82% tariff is imposed on whole chickens imported from the US. Import tariffs on carcasses are now 31%; boneless cuts 12%; offal 30%; and bone-in portions 37%. This means imported chicken products cannot undercut the costs of locally produced products in such a way that they impact their business.”

Usapeec says that although US imports represent only about 3% of South Africa’s annual poultry production, they are bringing new choice to the market.

Anthony Schneiderman, a director of frozen meat and poultry trading company Federated Meats, says there is significant growth potential for imported chicken in the South African market.

“Imported chicken represents only a fraction of the total chicken output in South Africa, but there is a strong demand for it,” he says. “We find that customers at the Cambridge, Choppies and Jwayelani stores actively seek out imported chicken, even though it is more expensive.” Federated Meats has already imported and sold in excess of 4 000 tons of US chicken.

Athena Mpitsang, founder of poultry importer Dini Lesizwe, formed her new company to benefit from the renewed import opportunity. Mpitsang, who visited the US this year as a Cochran Fellow and guest of Usapeec, says she was impressed by the exceptionally high standards at US processing facilities and believes the chicken imported to South Africa is of a particularly high quality.

“I sell directly to a wholesaler in the Western Cape, and demand is picking up steadily,” she says. Mpitsang’s imports, totalling 104 tons last year, have already topped 378 tons this year and she expects this to increase. “I focus on the small leg quarters, which are popular in the local market. My research has shown particularly high growth opportunities in small towns in the North West province, so I envisage expanding my business into that region in future.”

The US import quota system is specifically geared to give Historically Disadvantaged Individuals (HDIs) an opportunity to enter the import-export market and so create jobs and help grow the South African economy, says Usapeec.

Sharp notes that as part of its efforts to boost trade ties and support local economic growth, the US recently hosted a delegation of HDI importers in the US, where they met producers and exporters for talks on ways to improve their import businesses. In addition, through its World Poultry Foundation (WPF), the US poultry industry has successfully completed its first two rounds of training to improve production skills and farm management capabilities of small-scale South African poultry and egg farmers in rural areas.

Working with the KwaZuluNatal Poultry Institute (KZNPI), the WPF retained the services of Dr Mike Lacy, a visiting Fulbright specialist and professor emeritus of poultry science at the University of Georgia, to deliver week-long training modules in Pietermaritzburg, which attracted small producers, provincial extension agents, and private extension providers. Both sessions, held at the KZNPI, were booked beyond capacity, and attracted 63 trainees.

The WPF will continue to sponsor training this year and next year and will also work with the Future Farmers Foundation of South Africa (FFFSA) to take promising young poultry farmers to the US for additional training on poultry husbandry. Focusing on South African men and women between the ages of 16 and 30 with a passion for poultry and egg production, FFFSA will use the grant for internships with US poultry and egg companies.

“US agricultural and trade bodies believe a thriving freetrade ecosystem benefits all stakeholders, and we are working to grow the poultry sector across the US and Africa for the benefit of American and African producers, wholesalers and retailers,” says Sharp.

Moore is the USA Poultry and Egg Export Council’s vice-president of communications in Atlanta.

For more information visit www.usapoultry-rsa.co.za. Follow on Facebook and Twitter @ USpoultryRSA.