The SA poultry industry, which has been harangued by record-high feed costs, intensifying load-shedding and imports being dumped in the local market, is gearing up to find new markets in Saudi Arabia and the EU, the SA Poultry Association (Sapa) said.
This is as the industry awaits a decision by trade, industry and competition minister Ebrahim Patel in August on whether anti-dumping duties that were suddenly retracted in 2022, will be reinstated on chicken imported from five countries including Brazil, to protect the local sector.
Delivering his annual state of the poultry industry address at a media round-table on Wednesday, GM of Sapa Izaak Breitenbach described SA’s poultry industry in the short to medium term, as “an industry in distress” owing to a combination of headwinds.
This is as the sector grapples with the effects of the war in Ukraine, load-shedding, avian influenza, record-high feed costs, and suspended antidumping duties against Brazil and four other European countries, which have led to a material increase in imports from Brazil though off a lower base.
The poultry master plan, which was signed by stakeholders in 2019, prioritised growing local exports to strengthen the competitiveness of the industry. But instead of increasing, chicken exports have dropped every year since the master plan was signed, according to the FairPlayMovement — a not-for-profit trade movement that aims to end predatory trade practices between countries.
Breitenbach said exports were an important strategic move for the industry that would open access to new markets, and Sapa is targeting the EU and Saudi Arabia as new future export markets for SA’s cooked chicken and boneless portions products, citing high margins to be attained for the products, specifically in the EU.
SA now exports poultry to the UAE and to SA’s neighbouring countries across the Sadc region.
In a bid to shore up local export volumes, as envisioned in the poultry master plan, Breitenbach said: “The EU is a net importer of cooked breast meat and the prices of chicken in the EU are fairly good, therefore we have a market,” he said, adding that Thailand and Brazil accounted for most of the imports in the region.
“Saudi Arabia is one of the countries with the biggest populations; here we are talking about a country that is a net importer of cooked chicken, though it does have a small chicken industry, and it will continue to be a net importer for a long time still to come.”
He said the association had made “material progress” in that regard, having completed and submitted the required Residue Monitoring Plan (RMP) for the EU. The body said it received feedback and would apply for export accreditation to the region, in three weeks’ time.
Additionally Sapa has also made progress in terms of Saudi Arabia, having completed the same RMP — a risk assessment undertaken to assure that products imported into these countries will not contain harmful levels of chemical residues.
“We are now awaiting a visit from the Saudi Arabia authorities to come and inspect our facilities, with the aim of exporting to Saudi Arabia.”
According to data by global technology group Knoema, poultry meat imports for Saudi Arabia were 634,551 tonnes in 2021, tending to increase year on year since 1972.
SA now exports 26,000 tonnes of chicken per year, with an export value of R622m, and the master plan envisaged chicken exports doubling in the three years to 2023, then doubling again by 2028 and continuing to grow after that.
Getting a certification can take anything up to 24 months, and once that has been achieved, SA needs to prove through rigorous and constant testing that it is compliant with the EU import requirements — only then can exports take place.
However, Sapa is confident of the local industry’s capacity to supply those markets, saying SA would not need to produce more chickens.
“We produce enough chicken,” he said. “What we will see is that the product that’s exported will just come off the fresh product that we produce, and then cook for export.”
The master plan identified dumped products and illegally traded chicken products as key factors in causing distress in the local sector, and so the industry was shocked in 2022 when Patel scrapped the anti-dumping duties against the five countries.
Nevertheless, Breitenbach said the sector would continue to engage the department of trade, industry and competition, and the department of agriculture to plead the case of local producers. The association is also commissioning a study to assess the effect of tariffs on prices, the outcomes of which are expected in about the third quarter of the year.
“We will lobby minister Patel that we do get that tariff in August this year,” he said.
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