SOUTH AFRICA – The South Africa Association of Meat Importers and Exporters (AMIE) has called for removal of all trade tariffs on chicken imports and suspension of any new tariff measures in the industry for the next three years to combat rising chicken prices.
According to Amie, implementing the three-year suspension of trade measures will result in a 33% drop in the price of bone-in chicken pieces and chicken offal could cost consumers up to 20% less.
AMIE CEO Paul Matthew says South Africa is facing a chicken price “tsunami” as a result of escalating inflation, global food and commodity shortages and the state of the economy post Covid-19.
In addition, factors such as the impact of the war in Ukraine on global food security; escalating fuel, transport and electricity costs; increasing trade tariffs; supply chain disruptions; lower wages for poultry workers; and unemployment, are also having a negative impact on chicken pricing.
Without interventions, financially-constrained South African poultry consumers will increasingly not be able to afford chicken products.
“We know that chicken is the primary, most affordable and therefore the most important source of protein for South African consumers.
“As a country, we have to do everything possible to arrest poultry price increases, and the quickest and most effective way to do this is for the government to give the South African consumers relief by placing a three-year moratorium on imported poultry tariffs, and the removal of Vat on poultry products,” he said.
In March 2020, import tariffs on poultry increased from 37% to 62% on frozen bone-in chicken portions, and increased on frozen boneless portions from 12% to 42%.
In addition, in December 2021, the South African government levied new provisional duties on poultry imports from Brazil, Poland, Spain, Denmark and Ireland.
The duties range from 6% to 265.1% for various poultry producers from Brazil, from 39% to 67.4% from Denmark, 158.42% from Ireland, 5% to 96.9% from Poland, and 3% to 85.8% from Spain. These provisional duties will remain in place until June 14 this year.
Poultry association rejects call for suspension of tariffs on chicken imports
However, South African Poultry Association (SAPA) does not support AMIE’s proposal.
SAPA GM Izaak Breitenbach, has highlighted that removing tariffs for three years will not address the issue that was precipitated by high raw material (maize and soya) prices that are at an historic high.
“Removal of tariffs will put the poultry industry on a trajectory of decline that will be devastating,” he adds highlighting that the move will cause material hardship for South Africa, with reduced economic activity, job losses and losses to the fiscus.
Nonetheless, SAPS supports the removal of VAT as a measure to reduce the cost of poultry products to the low-income earners.
“We would refine the call for Vat-free chicken to focus on the products consumed by low-income consumers and that the Vat-free campaign specifically focus on those.
“One example of a product like that would be IQF [individual quick freezing] chicken that is consumed by the lower LSM consumers in the country and in that way the government can give relief to the relevant consumer,” says Breitenbach.
Chicken imports from South Africa’s trade partners account for just 14.9% of all chicken consumed in the country, but are critical in maintaining a healthy balance between availability and affordability.
This excludes the import of mechanically deboned meat, which South Africa does not produce but which is critical for the production of further processed products.