Deboned meat imports plunge 73%

CUMULATIVE imports of mechanically deboned meat (MDM) for the first half of this year declined by 73% compared to the same period last year due to the depreciation of the local currency, data from the Livestock and Meat Advisory Council (LMAC) showed yesterday.

It said the depreciation of the local currency made imports more expensive relative to local animal protein substitutes.

The average cost increased by 65% from US$450 per metric tonne (mt) to US$743, LMAC said.

The average monthly imports over the six months to June 2020 were 62mt, compared to 169mt over the same period last year.

In total, imports for the first six months were 370mt.

“The depreciation of the local currency has made imports more expensive relative to local animal protein substitutes, driving the decline in MDM imports for use in the processed meats industry,” LMAC said.

“As local meat prices continue to decrease in US dollar terms, the expectation is that imports of MDM will continue to decline.”

LMAC said the total value of MDM imports to June 2020 amounted to US$317 338 whereas in the same period in 2019, total imports amounted US$456 350.

Generally, imports of MDM have been on a downward trend since 2015.

The global meat processing industry is expected to experience a soft recovery in the second half of the year as countries seek to reopen their economies.

“The COVID-19 containment restrictions had a big impact on the food service and traditional distribution sectors and prices fell almost everywhere in the second quarter of 2020,” LMAC said.

“Severe supply disruptions have also been experienced. The outlook is gradually improving as measures are being eased in most markets.”

In March 2020, the South African government substantially increased the applied most-favoured nation import tariffs on bone-in chicken meat as well as on boneless chicken meat.

Imports of sausage casings in the period under review amounted to US$352 869, a decrease of 32% on imports in 2019.

A total of 24mt was imported compared with 55mt in 2019, a decline of 56%.

LMAC said monthly imports of sausage cases reflected supply dislocations.

For instance, no imports were registered in April while very small quantities were imported in May.

The average import cost of sausage casings for the first six months of 2020 was US$15 962 per mt, an increase of 94% over the same period in 2019.

Apart from meat imports, big manufacturers and retailers across the markets have also reported that volumes have been declining this year.

Analysts predict that this trend may not fizzle out unless spending power is restored.

But the Zimbabwean market has failed to ride out of a series of crises since the time bond notes came into circulation in 2016.

Currency volatilities that affected the market before June, when the Reserve Bank of Zimbabwe introduced the foreign currency auction system, sparked a serious erosion of wages, with implications in the way consumers choose how to spend.

In the past four months, however, the Zimbabwe dollar has stabilised steadily against the greenback at US$1:$81, from US$1:$2,20 in June last year, leveraging on the foreign currency auction system.