AMIE warns of higher poultry prices

28th November 2023 By: Schalk Burger - Creamer Media Senior Deputy Editor

Industry organisation the Association of Meat Importers and Exporters of Southern Africa (AMIE) has warned that poultry prices may increase over the festive season and into the new year owing to the poultry shortages caused by the highly pathogenic avian influenza, or bird flu, outbreak and the failure of government to timeously introduce a rebate on import tariffs and other emergency measures.

To address the poultry shortages caused by the bird flu outbreak, the local poultry industry has imported 83-million fertilised eggs. However, they were imported on an urgent basis at three times the price of a locally grown day-old chick.

“This cost will result in price increases, which will, of necessity, be passed onto consumers. These price increases have not yet made it onto the shelves, as it affects poultry not yet in the market. However, we expect that this product will enter the market in the first quarter of 2024 with a price increase,” says AMIE CEO Paul Matthew.

“The price increases are inescapable, unless government takes action now. Every effort needs to be made to keep poultry prices down and ensure the country is food secure, and that the poor are able to afford poultry. [Trade, Industry and Competition Minister Ebrahim Patel] is acutely aware of this, which is why he issued an urgent two-week call for comment on the introduction of a temporary rebate on poultry import tariffs on October 2.

“However, everything has now gone quiet. It is nearly December and there is no sign of a decision from the International Trade Administration Commission,” he says.

The price of eggs increased by 19% between September and October, and 36% year-on-year in October.

Further, chicken feet and gizzards increased by 8% year-on-year and chicken livers by 14% year-on-year.

The social impact of the increase in chicken prices cannot be overestimated. Chicken remains the most affordable and essential source of protein for consumers, especially the poor, who are struggling to meet their families’ basic food security needs. Pressure on consumers is increasing as evidenced by last week’s release of the October annual consumer price inflation figure, which has climbed to 5.9%, he avers.

Further, even with the rebate, demand for domestic chicken will exceed domestic supply, and will, therefore, have no impact on the sales of domestic products.

However, the rebate will provide some relief to consumers who have faced very high food inflation. It is estimated that for every 10% increase in the aggregate import price from duties, there is a 4.8% increase in the consumer price of frozen chicken.

“Import duties are an extremely regressive form of tax, meaning that it impacts consumers most directly. Where there is legitimate dumping, it must be addressed, but extreme import tariffs on all imported chicken is not the answer,” Matthew says.

“Imports are a critical and necessary measure to ensure the country has sufficient supplies of vital protein to feed the nation, and to plug the ongoing gaps in supply. The current bird flu crisis illustrates this perfectly, as domestic producers facing severe shortages turned to global trade partners to help replenish their poultry stocks.

“These strategic partnerships are profoundly important, not only to the domestic market, as evidenced, but also to consumers and, thus, must be preserved,” he says.