Hume International has warned of job losses if the government does not implement proactive measures to avoid the crisis of South Africa's chicken supplier Brazil as it detected two cases of avian influenza in wild birds.
In a statement, Hume said per guidelines from the World Organization for Animal Health (WOAH), the incident will not trigger a ban on poultry exports from Brazil unless the virus spreads to commercial flocks.
Hume International managing director Fred Hume said: “However, the contagious nature of the Highly Pathogenic Avian Influenza (HPAI) has led to the worst global outbreak of bird flu on record, which means that South Africa must prepare for the worst.
“If imports from Brazil are banned, there would be an immediate and potentially crippling impact on the local market which would cost thousands of jobs, cause dramatic increases in prices, and result in supply shortages,” he emphasises.
He said it’s not only prudent but necessary to consider the dire consequences that would unfold should the outbreak impact chicken imports from Brazil.
“Local poultry producers simply cannot satisfy local demand, and South Africa is heavily reliant on Brazil to fill the void in supply,” he said.
According to Hume, the National Agricultural Marketing Council (NAMC) notes that Brazil provided as much as 75% of South Africa’s imported chicken in 2022.
“Given the heightened demand for the cheaper animal protein, especially among struggling and financially vulnerable households, Brazilian chicken imports thus play an essential role in supplementing local supply chains,” Hume said.
He said Brazilian chicken was vital to local supply chains, and there is no credible replacement partner that has been approved by the Department of Agriculture, Land Reform and Rural Development (DALRRD).
“The government urgently needs to consider possible measures to prevent the potential devastation that would follow should Brazilian imports be halted,” he said.
Hume said to reduce some of the impacts of a potential ban on Brazilian chicken, the government first needs to extend the suspension of new import duties on frozen chicken.
“These include sizeable tariffs of 158.4% on chicken imports from Ireland; 96.9% on Poland; 85.8% on Spain; and 67.4% on Denmark.
“These duties were suspended in August last year for 12 months in response to soaring food prices, but are soon due to be reinstated – potentially placing severe pressure on import supplies and food inflation,” he said.
Hume said the government could also consider adjusting its import policies regarding countries such as Brazil and Argentina to allow for regionalisation in the case of bird flu outbreaks.
“In keeping with the precedent already set by its trade policy regarding the United States of America, this would limit poultry bans to imports from specific provinces where there is bird flu, as opposed to the entire country,” he said.
Hume said the government could consider implementing heat treatment protocols for MDM from countries where there is bird flu.
“While MDM is already subject to heat treatments before shipping, additional treatments would set consumers’ minds at ease while ensuring a steady supply of the key ingredient for meat manufacturers.
“The government, industry representatives, and businesses urgently need to convene and discuss the way forward in case of emergency. We cannot afford to bury our heads in the sand – the government needs to act to reassure consumers and provide businesses with certainty," he said.
Independent analyst Anthony Clark said a report on avian influenza (HPAI) may seem rather granular and dreary.
“However, its potential import to the highly contentious import of poultry product – especially that from the world’s largest exporter Brazil, could be a newsworthy event to South African poultry producers (if) the Brazilian commercial poultry stock gets infected leading to – like Argentina – an export ban. Brazil is the largest poultry exporter by value to South Africa. March 2023 monthly imports were R360 million,” Clark said.
He said this HPAI issue in Brazil is one to watch.