Trade shifts as tariff walls go up

South Africa’s food inflation rate dropped again in March 2025, the Bureau for Food and Agricultural Policy (BFAP) reports in its monthly food inflation brief.

Food inflation dropped to 2.7% in March from 2.8% in February. South Africa’s general inflation rate, as measured by the consumer price index (CPI) also dropped to 2.7%, so the two rates ended the month on level pegging.

Both rates have dropped considerably since 2023, when the food inflation rate peaked at nearly 14% and CPI inflation was around 7%.

“In March 2025, year-on-year inflation on food and non-alcoholic beverages remained below the 6% upper-limit inflation target for the 13th consecutive month,” BFAP reported.

The highest inflation rates in March were in the fruits and nuts and non-alcoholic beverage categories, with both registering a 7.9% increase over the previous year. Meat showed the lowest annual increase, at 0.4%, after a monthly drop of 0.3% in March.

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The continuing spread of bird flu has prompted the Global Virus Network, representing scientists from 40 countries, to call on governments to increase virus control measures and to prepare for potential human-to-human transmission.

The dominant H5N1 strain of bird flu has now spread across Europe, Asia, the United States – including all 50 US states – and Canada, as well as South America, Southern Africa and Australasia.

While bird flu has killed thousands of animals and infected more than 900 people worldwide, with a death rate of nearly 50%, it has not yet developed the ability to spread between human beings.

The Global Virus Network (GVN) published an analysis of the North American outbreak and its call for a global focus on bird flu in an article in The Lancet Regional Health – Americas.

In a media release, the GVN said multi-government action was needed to mitigate “the rising threat of H5N1 avian influenza”.

Dr Sten Vermund, GVN chief medical officer and dean of public health at the University of South Florida in the US, said understanding the current landscape of H5N1 infections was critical for effective prevention and response.

“The virus’s ability to infect both animals and humans, combined with recent genetic changes, underscores the importance of proactive surveillance and rapid response measures,” he said.

The GVN virologists emphasised the need for improved pandemic preparedness, drawing on lessons learned from the SARS-CoV-2 pandemic and previous outbreaks. They advocated a multi-faceted approach to pandemic preparedness, stressing the need for enhanced surveillance and biosecurity.

Their 10 recommended steps included continuous monitoring and testing to track virus evolution that could lead to human-to-human transmissibility. They also recommended investment in rapid vaccine development for both humans and animals.

Noting that bird flu had spread to cows in 1 000 US dairy herds, the GVN recommended “urgent efforts to understand and interrupt transmission in cattle through herd management and potential vaccination”.

The scientists called for more international collaboration to track data and share research on bird flu, and to prepare for emerging viral threats, reduce community vulnerabilities and improve response strategies.

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The French government is cutting its financial support for bird flu vaccinations, angering the country’s poultry farmers.

The government has announced that it will reduce its financial contribution to the vaccination campaign against avian influenza from 70% to 40%, Poultry World reports. The state will also no longer buy the vaccines but transfer the responsibly to the sectors and organisations themselves.

The reductions have been forced by the need to cut French government spending.

French poultry organisations said in a joint statement that the funding cuts would undermine France’s successful bird flu vaccination campaign and increase the risks to public health.

“Maintaining the contribution of the state at 70% is vital for the efficiency of the vaccination, which prevents the culling of many thousands of animals at high costs for the government for compensation of the farmers,” they said.

“The situation in other regions, like the US or closer to us Hungary, shows that the vaccination strategy against avian influenza is the only solution to prevent a health catastrophe. The State has to continue to take her responsibilities,” the poultry industry said.

Even at reduced levels of 40% support, South African poultry farmers will look with envy at the payments their French counterparts are receiving. 

The South African government is stalling a bird flu vaccination programme, rather than encouraging it, and if vaccinations get underway then farmers will have to bear all of the costs themselves.

The French government has not reduced its compensation payments to farmers for birds culled during bird flu outbreaks. The South African government pays nothing, and is appealing against a court order directing a change in this policy.

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South Africa’s largest poultry producer, Astral Foods, expects earnings to drop by up to 60% when it reports results for the six months to end March this year.

A trading update by Astral Foods said the decline in profits could be between 50% and 60% lower than the same period last year. 

It referred to an earlier update in March this year, in which Astral said selling prices for its chicken products remained under pressure and feed input costs had risen due to higher maize prices.

Astral also warned then that earnings for the first half of this financial year could be up to 60% lower than the “strong set of results” it had reported for the first six months of the 2024 financial year.

The interim results are due to be published on 19 May.

Astral has returned to profitability after suffering the only loss in its history due to the poultry industry’s disastrous year in 2023, when bird flu and national electricity shortages cost poultry producers across the country an estimated R9.5 billion.

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Tanzania imposed a ban on all South African agricultural imports last month, in retaliation for what it said was a South African ban on the import of Tanzanian bananas.

The ban lasted all of two days. Tanzania lifted it, together with a similar ban on agricultural products from Malawi, saying it was doing so to allow for “a diplomatic ministerial discussion”.

Agricultural economist Wandile Sihlobo investigated, and reported that South Africa had never banned Tanzanian bananas – there had been no imports because Tanzania had never requested market access for its bananas in South Africa. 

“This is a vital step and a formal procedure for importing agricultural products. It is not just applied to Tanzania but to all countries,” he wrote in a blog.

He also doubted that, with the required agreement, Tanzania would be able to compete on price with bananas from Mozambique, which supplied 74% of South Africa’s banana imports, Eswatini (19%) or Zimbabwe (2%).

Sihlobo thought the Tanzanian government had over-reacted, and that the temporary ban had possibly violated the free trade area rules of the Southern African Development Community. 

He believed the issue resulted from inadequate communication, and said the correct course for Tanzania would be to engage with South African agricultural authorities.

South Africa’s minister for internal relations and co-operation, Roland Lamola, diplomatically welcomed Tanzania’s lifting of the banana ban, saying it underscored the strong relations between the two countries.

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Poor people are going to be the hardest hit by the South African government’s decision to scrap the proposed additional food exemptions from value added tax (VAT), FairPlay said in a statement.

Because VAT is no longer going to increase from 15% to 15.5%, the government has cancelled plans to extend the list of essential foods free of the tax. 

FairPlay founder Francois Baird welcomed the news that VAT would not go up, but said “forcing poor people to pay more for food is a shocking way for the government to try to make up for the revenue it will lose by not increasing VAT.”.

The government had received multiple suggestions from economists and political parties on how the government could cut its spending without increasing VAT. 

“Not one of them suggested that the cuts should target millions of poor and hungry South Africans.”

In earlier budget proposals, the government has planned to cushion VAT hikes by exempting more essential foods, including some tinned vegetables and some meat products, such as chicken offal. With the VAT increase off the table, those concessions have been withdrawn, the Treasury said in a statement.

This was the wrong decision when millions of South Africans could not afford a healthy diet, Baird stated. The need had become ever more urgent in the years since the VAT-exempt basket was last increased in 2018.

Then, and now, that list should have included “VAT-free chicken” – the frozen chicken portions on which low-income households rely as their primary source of meat protein. Every year since 2018, poor people have had to pay an additional 15% for every chicken portion purchased.

“Official statistics show that poverty, hunger and unemployment have increased steadily since 2018, with rising totals of hungry families and malnourished children. The Human Sciences Research Council (HSRC) reported last year that nearly 30% of South African children under the age of five are stunted. 

“Stunting, caused by chronic malnutrition, affects these children both physically and mentally for the rest of their lives.”

Last year, FairPlay had supported the application by poultry producers and chicken importers for the removal of VAT from frozen chicken portions and fresh and frozen offal products such as chicken heads, feet and livers. 

“This was a pro-poor proposal aimed at helping poor people feed themselves and their families.”

In response, the government had announced plans to add a number of essential foods to the VAT free basket, including offal but not the badly needed relief on chicken portions. 

“Now that there is to be no VAT increase, there is also to be no extra VAT relief on anything. This is an appalling decision at a time when millions go hungry every night. The government should find other ways of saving, instead of targeting the poor. 

“FairPlay hopes there will be a rethink. There are weeks of debate to come before the national budget is finalised. It is time to put poor people first, not make them suffer more,” Baird said.

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