A four-year decline in poultry imports into South Africa has come to an end, with imports for the first 11 months of 2023 already higher than the total for 2022. This means that chicken imports in 2023 will comfortably exceed the previous year for the first time since 2018.
The increase does not (yet) signal the start of another assault on the South African poultry market such as the floods of dumped chicken portions that did so much damage to the local chicken industry in previous decades, but it will be watched with concern by South African poultry producers.
Poultry imports, nearly all of which is chicken, peaked at 566 000 tonnes in 2018. Since then, import volumes have dropped steadily and were down to 373 000 tonnes last year.
The reasons for the years-long decline are multiple, and difficult to separate. They include widespread outbreaks of bird flu in Europe, the United States and Argentina, the Covid pandemic disruptions to production and distribution and, probably to a lesser extent, higher import tariffs.
The recovery has come despite continued episodes of bird flu in Europe – only three EU countries can now export to South Africa, after most were banned – and the US, where 23 states are currently under bird flu bans.
There are some interesting standouts in the various categories of frozen chicken imports and the countries dispatching them.
The first are high and rising volumes of imports or the two largest import categories – mechanically deboned meat (MDM), a paste used to manufacture processed foods, and offal, which includes chicken heads, feet and livers. MDM comprised 62.6% of chicken imports in November, and offal 18.5%.
Both have been rising all year, and are at their highest levels since 2020. The main source for both is Brazil, which now supplies 80% of South Africa’s chicken imports and is so far free of bird flu. The EU, which used to be the biggest supplier until it was ravaged by bird flu, has slowly recovered to 7%.
While Brazil dominated the imports list, the US, despite its own bird flu problems, remains the main source of the imports that do most damage to the local industry – bone-in chicken portions such as leg quarters, thighs and drumsticks. These come in free of anti-dumping duties after the US forced a substantial duty-free quota on South Africa in 2016, as a condition of renewing the Agoa trade deal.
Smaller volumes come from Brazil and the EU, where companies were found guilty of unfair pricing and are subject to anti-dumping duties.
There is good news for South African chicken producers. While South Africa is importing more MDM and offal, imports of bone-in chicken are declining steadily. Bone-in portions are down to 14.5% of chicken imports and this year’s total will be the lowest since 2020.
That does not mean that imports of bone-in chicken are insubstantial or that they do not hurt. While volumes are down from 287 000 tonnes in 2018 to 66 000 tonnes in the first 11 months of 2023, those diminished 2023 imports had a landed price of R1.17 billion.
Like all of South Africa’s R4 billion annual chicken imports, those are sales that South African farmers did not make and chicken that did not eat South African grain or create South African jobs.
Whether these trends will continue in 2024, and whether a new increase in dumped bone-in imports is looming, remains to be seen. What is clear is that what have become set patterns in the imports market are changing.