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SA industry says it can replace chicken imports

The South African poultry industry is sounding increasingly confident of its ability to replace dumped chicken imports with local production and local jobs.

This applies particularly to the bone-in imports – mainly leg quarters, but also other portions such as drumsticks, thighs and wings – that have been dumped in South Africa, with unfairly low prices causing contractions and job losses at local producers.

All of South Africa’s anti-dumping applications have focused on imports of frozen bone-in imports from Brazil, the European Union and the United States.

A regular argument from chicken importers is that imports are essential because local producers cannot meet demand, and therefore cutting off imports would result in shortages and price increases.

The truth is that dumped imports have constrained local producers, limiting investment, expansion and job creation while imports have grabbed most of the increasing local demand for chicken.

The poultry sector master plan aims to reverse this situation, limiting imports, acting against dumping and illegal trade and encouraging increased local production to supply expanded local and export markets.

Part of this is happening. Local capacity has increased in line with the industry’s master plan commitments, but demand is still lagging mainly due to the economic impact of Covid-19 disruptions. The result is spare capacity, not an inability to meet local requirements.

According to SA Poultry Association chairman Aziz Sulliman, the industry has so far spent R1.14 billion to increase slaughter capacity to 22.5 million birds per week from 19 million birds per week in 2019.

The head of SAPA’s broiler organisation, Izaak Breitenbach, told Landbouweekblad that current production was 20.5 million birds per week, about a million below the total the industry would like.

Even though demand is rising as markets normalise, it still leaves unused capacity of between 1 million and 2 million birds per week and Breitenbach said that, while the latest anti-dumping duties on bone-in imports from Brazil and four EU countries could put short-term pressure on local producers to meet demand, over the longer term local farmers would be able to supply sufficient chicken for the South African market.

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