The Association of Meat Importers and Exporters (Amie) has forecast a 460 000 tonnes shortage of meat this year as it urges the International Trade Administration Commission (Itac) to reduce the import duties for 12 months on frozen bone-in chicken from 62% to 37%, boneless chicken from 42% to 12% and to zero-rate chicken offals.
Amie said a temporary, controlled relaxation of duties would help to address the current chicken product shortages and ensure the most vulnerable in society were cushioned against rising costs due to the latest Highly Pathogenic Avian Influenza (HPAI) outbreak.
Amie noted that during 2017/18, when the country grappled with one of its most severe HPAI outbreaks, the gap between what the country consumed and what was produced was 483 000 tons. For 2018/19, it was 511 000 tons, 437 000 tons in 2019/20 and 2020/21 and 287 000 tons in 2021/22. Estimated shortages for 2022/23 are 460 000 tons.
Paul Matthew, the CEO of Amie, said, “If we consider the current HPAI outbreak as causing a 16% reduction in domestic production in 2023/24, this gap will escalate to 847000 tons. Given the long lasting impact of HPAI and the likelihood of its recurrence, South Africa’s options for supplementing shortages will be severely limited without a temporary rebate on the ordinary customs duty.’’
This comes as Minister for Trade Industry and Competition Ebrahim Patel, earlier this month, called on Itac to consider a temporary import duty rebate on fresh, chilled or frozen chickens ahead of a looming shortage as a result of a severe outbreak of avian flu.
In a government gazette notice, Patel recently asked Itac to investigate, allow public comments, and decide on the possibility of a temporary rebate on import taxes and anti-dumping duties for importers of poultry in response to the outbreak.
The Amie is urging for the 2020 review of bone in-chicken tariffs, which were hiked from 37% to 62% and boneless chicken from 12% to 42%, with an undertaking to review this after three years that expired in March this year.
‘’The duties were never reviewed. Amie’s recommendation to Itac is that, in light of the current outbreak, it considers returning to the original duties prior to the March 2020 increase, and it considers applying a 0% duty on the import of chicken offal,’’ Matthew said.
The Amie has also urged Itac to extend the rebate to shipments already on the water to ensure immediate access to products.
“The temporary rebate will help mitigate the supply shortage on households, particularly poor households that are increasingly vulnerable to food insecurity. Reducing the duties will allow chicken to be imported at an affordable price, while providing the local industry time to recover from the recent outbreaks,” Matthew said.
According to Amie, recent data released by the Department of Agriculture, Land Reform and Rural Development shows that a total of 50 HPAI H7 outbreaks and 10 HPAI H5 outbreaks were reported by September 21 and cites the SA Poultry Association (Sapa), indicating that, so far, 5 million birds had been culled this year, representing 20% of the country’s commercial layer flock.
In addition, 30% (2.5 million) of the national broiler breeder population have been culled.
This has led to the country facing severe shortages in chicken and egg supplies, with some retailers having to ration these products.
Experts have projected South Africa's stock of layer hens to decline to an all time low of 17.3 million birds, down 23.8%, a more than 10 million flock decline from 27.6 million in 2019, while it will take the industry at least 17 months to recover.
The lack of adequate supply to feed consumption in the country has also led to higher prices, which Amie believes is deeply concerning considering that chicken and poultry products are the main source of essential protein for millions of low-income households.
“While a 12-month rebate helps to alleviate shortages and temper prices, we believe Itac should also consider a responsive rebate permit mechanism that can be quickly activated when needed, without the need for time-consuming processes and delays. Agility and speed are essential when we face crises like we are currently seeing in the local supply chain,” Matthew said.
BUSINESS REPORT