The local poultry industry, both producers and importers await, with bated breath for the government’s progress report on the Poultry Master Plan. Photo Ayanda Ndamane/African News Agency/ANA
The local poultry industry, both producers and importers await, with bated breath for the government’s progress report on the Poultry Master Plan. Photo Ayanda Ndamane/African News Agency/ANA

Local chicken producers blamed for trying to peg their prices

By Banele Ginindza Time of article published Oct 24, 2021

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Johannesburg – The local poultry industry, both producers and importers await, with bated breath for the government’s progress report on the Poultry Master Plan.

The report will give clarity on a range of issues in the industry which has seen consumers pushed to the edge with spiralling costs of South Africa’s most popular protein source.

Local producers have made a fresh application to the International Trade Administration Commission (ITAC) for a new tariff structure to control anti-dumping practices by Brazil, Denmark, Ireland, Poland and Spain, a move local producers were unhappy with, citing a consequent increase in poultry prices, if import tariffs are effected.

The last tariffs implemented in March last year levied rates for Most Favoured Nations (MFN) from 37 percent to 62 percent for bone-in cuts and 12 percent to 42 percent on boneless cuts.

ChickenFacts, a research think tank, said this week the price of chicken has gone up by 14 percent compared to other meat types which have increased by a mere 6 percent, which they attribute to local producers trying to peg their prices to the import regime, an argument scoffed at by Fairplay, which says it is trying to level the playing field.

“Since July of 2017 to June of 2020, the amount of imports that have come in are about R6.4 billion in value, imagine if local producers, who have according to tenements of the poultry Master Plan invested R1 bn and created close to 2 000 jobs, had that kind of money, how many more jobs and value to the economy would have been created then,” Fairplay Founder Francois Baird said.

Fairplay has argued as well that the impact of Covid-19, which has had the economy under grips for close to two years has had an effect on the pricing of chicken, along with the increase in input costs like maize and soya, justifying the extra money the consumer has had to fork out.

The organisation says dumping chicken by the international community also has an effect on other aspects of the economy as local producers, cut off by poultry imports, have to export their crops at international rates, pushing up the cost for local producers as there is no price differential.

The major issue for Fairplay is that local producers are not subsidised by the state, leaving them to struggle against international producers who have already made their money on specialised cut.

“Brazilian chickens do not eat South African grain and so do European chickens or those from the US, what they send here amounts to pure profit, we are not against imports but we are against predatory trade, imports must adhere to local rules” Baird said.

The Poultry Master Plan agreed to by all parties, has so far not seen the implementation of a few tenements, the investment of R1bn by the local industry, facilitating the entrance of 50 black farmers, and the change of rules in packaging in which importers have to separate stock according to point of origin.

“We have not seen local producers exporting to other countries, it is very difficult for now to see what has been implemented, we need a progress report from the government on the status of the Master Plan,” Fairplay said.

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