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South African chicken prices set to soar

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South Africa is facing a chicken price increase tsunami due to inflation, rising costs, supply chain disruptions and global economy risk to food security.

File picture: Sxc.hu

SOUTH Africa is facing a chicken price increase tsunami due to inflation, rising costs, supply chain disruptions and global economy risk to food security.

So says the South African Association of Meat Importers and Exporters (AMIE), adding that it could be realised as soon as June this year.

The Department of Trade, Industry and Competition (DTIC) said it was monitoring prices through the Poultry Masterplan, but food price inflation was currently a global problem.

“We have noted domestically, high feed costs and Avian Influenza outbreaks which are currently rampant within the EU. Poultry continues to be under pressure both domestically and globally,” DTIC spokesperson, Bongani Lukhele said.

“Through the Poultry Masterplan process, National Agricultural Marketing Council continues to monitor the chicken prices including the rise that can be attributed to several factors ranging from input costs.

“The DTIC, Department of Agriculture, Land Reform and Rural Development and Industrial Development Corporation have established R1billion fund to support local businesses and farmers, amongst other new expansions in poultry farming and processing. The industry has also invested R1.14 bn and slaughtering capacity increased to 22.5 million birds per week. Food price inflation is currently a global problem.”

To mitigate this inflation, AMIE has called for the removal of trade tariffs on all poultry products, a three-year moratorium on any new tariffs, and supports the removal of VAT on the price of chicken.

Association chief executive Paul Matthew said South Africa’s trade partners accounted for 14.9% of all chicken consumed in the country, and the (import) sector was critical in maintaining a healthy balance between availability and affordability.

“The competition provided by a small import market has a material impact on keeping the price of chicken in check for consumers.

“South Africa is currently only producing around 80% of the country’s overall poultry demand, and is specifically unable to meet demand in certain cuts, such as chicken wings and leg quarters.

“Consequently, imports, even at such a low level, are essential and become even more critical when South Africa experiences frequent outbreaks of disease,” said Matthew.

“It’s important to note that, based on SARS data, chicken imports (excluding mechanically deboned meat/MDM) have in fact decreased by 41% between 2018 and 2021, with bone-in imports decreasing by as much as 53% for the same period. The pressing challenge for South Africa is not imports, but rather the ever-rising price of chicken, and consumers’ diminishing ability to afford it. Removing VAT and all tariffs will provide South Africans with some breathing space.”

Grant Hendricks, a black South African business owner and managing director of Umoya Meat Importers, said: “I run a South African meat import business and sell chicken products largely to the lower end of the market. I’ve seen how consumers in townships are increasingly struggling to afford chicken. While their wages stay the same, or decrease, they are finding it increasingly difficult to put nutritious food on the family table. The removal of tariffs and VAT on poultry will provide much-needed relief both for consumers and local businesses.”

Meanwhile local meat manufacturer Eskort has indicated that hard-hit consumers have increasingly turned to cost-effective options such as viennas, polonies, and liver or bacon spread for their choice of protein.

As at the end of March this year, Eskort said that demand for its viennas and spreads had spiked as much as 11.4% and 15.2% year-on-year respectively.

“Striking movements in sales volumes for lower-cost protein staples at retailers serving the LSM one to five market demonstrate that in response to rising financial pressure, both middle and low-income consumers have been on the hunt for bargains and affordable protein options,” Eskort chief executive officer, Arnold Prinsloo said.

Cape Times

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