SOUTH AFRICA – The South African Poultry Association (SAPA) is calling on the government to remove Value-Added Tax (VAT) on chicken and its production inputs, in a bid to provide much-needed relief for both consumers and poultry producers.
SAPA argues that this move is essential in managing the increasing costs of production and distribution, which have significantly affected the industry and, in turn, the price of chicken for South African consumers.
The poultry sector has faced several challenges recently, including rising feed and energy prices, as well as the impact of avian influenza outbreaks.
SAPA believes that excluding chicken and its inputs from VAT would help ease the financial burden on both sides.
By reducing production costs, poultry farmers could reinvest in their businesses, improve their competitiveness, and increase chicken supply while lowering consumer prices. This, SAPA says, would ensure that chicken remains accessible to all South Africans, especially those with lower incomes.
In addition to assisting farmers and consumers, SAPA argues that the VAT exemption could benefit the wider economy.
Beyond tax relief, SAPA is urging the government to take stronger action against illegal chicken imports. These imports, according to the association, undermine local producers, disrupt fair competition, and threaten South African jobs.
This call comes at a time when South African consumers are expected to see a significant slowdown in chicken price increases.
According to reports, the annual rate of price hikes for some chicken products is forecasted to ease to around 1%, a sharp contrast to the double-digit inflation rates seen in recent years.
The latest AgriTrends report from Absa attributes this price moderation to increased poultry production in Brazil and a stronger rand.
While around 20% of South Africa’s chicken, mainly frozen portions, is imported, the bulk of the supply comes from Brazil, which is anticipated to boost production.
The combined effect of this increased supply and the stronger rand is expected to slow chicken price inflation.
However, the Absa report warns that disease outbreaks could still disrupt trade patterns and push prices higher.
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