Apart from Rainbow Chicken, RCL Foods owns the Yum Yum Peanut Butter and Cerati Sugar brands.
- The government has significantly reduced taxes on imported chicken with a temporary rebate.
- This is in response to a devastating regional outbreak of bird flu that killed millions of chickens.
- But problems at SA's ports could prevent cheap chicken from reaching consumers.
- For more financial news, visit: News24 Business Top Page.
The government has reduced import duties on chicken as bird flu hits SA poultry farms, but problems at local ports could prevent cheap chicken from reaching consumers.
On Tuesday, the International Trade Administration Commission (ITAC), a national agency, announced a 25% rebate on bone-in chicken and a 30% rebate on boneless chicken. Chicken carcasses and organs are also given full rebates. This effectively means that import duties for boneless cuts will fall from 42% to 12%, and for bone-in products they will fall from 62% to 37%.
The commission said the measures were temporarily implemented to increase imports and help with chicken shortages following last year's devastating outbreak of highly pathogenic avian influenza (HPAI), or avian influenza. Stated.
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ITAC said in a statement on Tuesday that the rebate was implemented after a study found that there will be a shortage of 172,000 tonnes of domestic poultry products this year due to the avian influenza. According to the commission, this balance could be met through imports.
New duties imposed on imports of poultry products
Rebates will be given on poultry products including carcasses, boneless cuts, offal and bone-in, ITAC said.
According to that statement:
- Tariffs on carcasses will be reduced from 31% to 0%.
- Tariffs on boneless cuts will decrease from 42% to 12%.
- Internal customs duties will be reduced from 30% to 0%.
- Tariffs on bone-in products will drop from 62% to 37%.
Speaking to News24, Paul Matthews, chief executive of the Association of Meat Exporters and Importers (AMIE), welcomed the committee's decision and said that poor people who are starting to avoid chicken as a protein source due to its high price. He said it would ease pressure on families.
According to Pietermaritzburg Economic Justice and Dignity, the price of 10kg of frozen chicken rose in four years (December 2019 to December 2023) from R336.94 to R408.68.
The price of frozen chicken meat has increased by R71.74 over four years.
News24 Charlene Rood
However, the South African Poultry Association (SAPA) said the rebate would further exacerbate the ongoing struggles of the local poultry industry, which is recovering from an outbreak of bird flu.
Isaac Breitenbach, general manager of SAPA's broiler division, said there was no reason to offer the rebate.
Read | Bird flu: Poultry industry warns potential temporary import rebate could devastate bird flu
He said there were no shortages from September to December last year despite the bird flu.
“We do not foresee any meat shortages in the foreseeable future. We are working to replace lost fertilized eggs and raise 150 million eggs to alleviate the meat shortage issue in the lead-up to the holiday season. “We imported eggs. We don't see any reason why the rebate was put in place,” he said.
Breitenbach said chicken prices were not directly affected by bird flu, even though 9.5 million chickens were culled during the outbreak. He said it could take up to six months for local farmers to recover from the bird flu outbreak.
“We have normal supply and demand here. Last year was a devastating year for us. We had raw material prices that were so high that we couldn't pass them on to consumers, and the impact of load shedding. have asked the government for help, but “the rebate will only worsen the situation we experienced last year. This year, no business will benefit economically from the additional burden of this rebate,” he said. Stated.
Chicken import issue
Bone-in chicken imports have fallen by 27% in the past year, which is due to high import duties, but logistical issues at ports can threaten imports, with cargo taking up to 60% by the time it reaches the country. This is also because it could take ~8 months. Matthews said.
Local ports are extremely congested. South Africa's largest coal export terminal, Richards Bay Coal Terminal, saw its lowest export volume since 1992 last year due to rail troubles. Meanwhile, the deciduous fruit export season has gotten off to a dismal start, with Cape Town's port suffering from congestion due to equipment failures and reduced productivity. Exports of some fruits are down 60% from the previous year.
Roy Thomas, director of logistics and operations at frozen food supplier Hume International, said that despite the potential for lower prices for poultry products, logistics issues and reduced parcels would be a “disaster for cash-strapped consumers.” ”, he said.
South Africa imports more than half of its chicken products from Brazil.
News24 Charlene Rood
“Many food importers continue to experience delays and holdups at ports, and we expect these conditions to continue into the first quarter of this year.
“This has a very real and direct impact on the industry's ability to deliver products in a timely and cost-effective manner,” Thomas said.
