The steady rise in South Africa’s imports of chicken offal showed the need to keep chicken affordable, including pressing retail groups to keep prices down, according to agricultural economist Johan Willemse.
Writing in the Afrikaans weekly journal Landbouweekblad, Prof Willemse said hard-pressed consumers were turning increasingly to imported offal products. Supermarkets now had special displays of low-priced packs of chicken feet and necks.
Poultry producers were recovering slowly from the huge cost increases caused last year by electricity shortages and bird flu. As higher import tariffs were “most unlikely” this left the difficult options of trying to shorten the chicken supply chain, monitoring the prices supermarkets charged their customers and “putting the pressure there”.
Prof Willemse noted the steep increase in offal imports, which in May this year accounted for 20% of South Africa’s chicken imports.
“Experts believe this shows that consumers are under pressure and that there are not enough ‘cheap’ meat products available locally,” he said.
“The economy will have to grow and interest rates drop before consumers have more disposable income and the demand for meat, and prices, improves. Job creation plays a big role. In short, the macro-economy and the retail market need to recover.”
Imports accounted for 20% to 25% of South Africa’s chicken consumption, with 85% of chicken imports last year coming from Brazil. Imports in May this year were the equivalent of 100 million locally slaughtered 1.8kg broiler chickens.
“It is self-evident that the volume of cheap, subsidised chicken puts the whole domestic meat market under pressure. A person would have to be really naïve to think that import volumes do not replace local red meat and chicken meat,” Willemse stated.
Prof Willemse did not mention the campaign to remove the 15% value added tax (VAT) charged on chicken sales. But “VAT-free chicken” is aimed at the need he has identified for cheaper chicken products for low-income consumers.
The steep rise in offal imports has been a feature of the chicken import statistics over the past few years. Offal imports (chicken heads, feet, livers etc) doubled from 43 000 tonnes in 2017 to 86 000 tonnes last year. They may be even higher this year – by May offal imports were nearly 10% above the same period in 2023. The trade is substantial. In 2022, South Africa imported 68 562 tonnes of frozen chicken offal, with a landed value of R573 million. This rose by 25% last year to 86 252 tonnes valued at R891 million. These high import volumes are impacting the local poultry industry, making it difficult for farmers to recover costs by selling locally produced offal. Food price inflation and consumer demand are likely contributors to the increase, as illustrated by Prof Willemse. However, poultry producers are also concerned that some consignments of high-tariff goods such as bone-in chicken portions might have been mislabelled as offal, which is subject to much lower import tariffs. For the first three months of this year, offal imports were effectively tariff-free because rebates reduced tariffs to zero.
