SOUTH AFRICA–In a Gazzate notice published on 31 March 2023, the South African government has announced an increase in annual quota for frozen bone-in cuts of chicken (Gallus domesticus) imported from the United States (US) from 71,290 tonnes to 71,632 tonnes, with retrospective effect from 1 April 2022.
The US is one of the leading poultry exporters to South Africa, in addition to Brazil and the European Union. The US currently exports bone-in chicken meat to South Africa under a Tariff Rate Quota arrangement, exempting bone-in chicken imports from anti-dumping duties.
The increase was a result of an amendment done on Schedule 4 of the Customs and Excise Act (1964). The Act allows US frozen chicken to be sold in South Africa via a specific permit or recommendation of the Director General of the South African Department of Agriculture and Land Reform, subject to conditions set out by the Internal Trade Administration Commission.
The decision to increase the quota of frozen chicken that is allowed to be imported into South Africa from the US may be seen by some to be a compromise that must be made for South Africa to continue to benefit from the African Growth and Opportunity Act (AGOA) program.
However, it will hopefully also assist in bringing the price of chicken down for poverty-stricken households.
As the primary source of protein for low-income households, South Africans must have a range of price options to choose from when purchasing chicken.
However, the price of chicken has continued to increase since last year when Bloomberg’s Shisa Nyama Index revealed that 10kg of frozen chicken pieces was the most expensive item on the index.
According to the South Africa Poultry Association, chicken meat production will increase by 2023 by 2% due to economic recovery, with high revenue anticipated for the market year 2022.
The South African Poultry Association (SAPA) has previously invested 1.14 billion rands (US$78 million) since 2019 in the expansion of production facilities to support new commercial farmers.
Despite these investments in the sector, the recent increase in international feed prices, poor economic growth, and structural constraints have slowed the pace of growth seen in previous years.
Imports are forecast to increase by 3% in 2023 to meet local demand as global exportable supplies recover since local production remains insufficient to meet demand.
The impact of increased tariffs and the introduction of Anti-Dumping Duties (ADDs) imposed on poultry will limit the supply of affordable imports in the second half of the year.