Photo by: Duane Daws
Poultry meat imported into South Africa during 2016 displaced around 1.5-million tonnes of broiler feed, worth an estimated R8.2-billion or the equivalent of 15 medium-sized feed mills, which could have been locally manufactured, Animal Feed Manufacturers Association of South Africa (AFMA) said on Thursday.
AFMA executive director De Wet Boshoff noted that if government were to curb the “devastating influx” of cheap dumped chicken into the local market, it could have the potential to benefit more than just the South African poultry industry.
In 2016, bone-in-portion (BIP) imports reached 226 800 t, which translates to the equivalent of 378-million broilers a year. Converted to broiler feed, BIP imports represent 620 000 t of feed.
An increase of 620 000 t in broiler feed sales will increase national feed sales to 12.35-million tonnes, thus increasing feed sales growth to 5.3%, significantly higher than the mere 0.7% growth achieved in 2015/16.
[The imports] place a huge damper on the local feed industry,” said Boshoff, adding that, by addressing the current poultry crisis effectively, the South African government can unlock enormous economic potential throughout the entire food and grain value chains.
This, Boshoff believes, will, in turn, address critical issues raised by President Jacob Zuma in his State of the Nation address earlier this month, including economic growth, job creation, accelerated economic transformation and grassroots food security.
“All these goals are possible if government and its agencies were to effectively apply the measures and remedies at its disposal under World Trade Organisation rules,” AFMA said.
This could largely alleviate the current crisis caused by the influx of dumped poultry meat, replacing local products and inputs from not only the poultry industry, but also the local food and grain value chains.
During 2015/16, South African’s national feed production figures totalled 11.7-million tonnes with a gross turnover value estimated at R50-billion. AFMA members, representing the formal feed industry, produced 61% of the national total via 71 manufacturing facilities across the country, averaging production of 98 000 t/y of feed per mill.
Production by AFMA members amounted to 7.18-million tonnes with an estimated gross turnover of R31-billion, using 3.5-million tonnes of maize and maize products, and 1.2-million tonnes of soybean meal as major feed inputs.
Broiler feed production in the same year reached 3.32-million tonnes with an estimated turnover of R17.6-billion and a national market share of 46% of all products.
“Realistically speaking, it would be fair to argue that government’s policy and trade remedies will not be able to bring poultry imports to a total standstill, which is why AFMA wishes to draw attention to potential scenarios and the impact on the local feed industry, of curbing major poultry import lines for BIP and mechanically deboned meat (MDM), which respectively represent 42% and 40% of the total imported volume,” the organisation said.
Further, should government and industry be able to reach agreement on certain strategic issues, locally processed MDM could become a future strategic growth area which has the potential to increase local broiler feed sales to 12.94-million tonnes, creating growth of up to 10.3%.
Boshoff further commented that, should volume growth become possible, the increased throughput in feed mills might well lead to better cost recovery and lower feed prices for the poultry producer. Other economic spin-offs will naturally follow and include higher turnover, investment and reinvestment, economic growth and, ultimately, job creation.
“Increased feed volumes will most definitely benefit the entire grain value chain, owing to a higher demand for grains from the fertiliser, seed, production, trading, storage and handling, as well as the processing sectors.
“Government must not underestimate the greater benefit that halting poultry imports will present to the entire local food and grain value chains, the country, its industries and its citizens who desperately need jobs and a steady income,” the organisation said.