Will chicken exporters fund their new export mojo?

One of the largest obstacles to South Africa becoming a significant poultry exporter is the lack of state veterinary laboratories and infrastructure – which is likely to cost at least R330 million, and probably a lot more.

We ask, will AMIE support the export drive and put its money where its mouth is?

An export task group

Chicken importers have shown a new-found enthusiasm to be exporters as well. After years of complaining that the poultry master plan’s export drive was not happening, the Association of Meat Importers and Exporters (AMIE) has decided to lend a helping hand.

AMIE CEO Paul Matthew told a media briefing that export growth was a key aspect of the master plan. FairPlay has been saying that repeatedly, and wondering why AMIE seemed reluctant to contribute. As we have pointed out, there is a potential export bonanza in the master plan, but it will take work, including by AMIE, to realise it.

Now AMIE says it intends to establish a “dedicated export task group” to help get the export drive going. FairPlay hopes that is within the ambit of the master plan, and not outside it because AMIE has said it is reconsidering its master plan involvement.

We also hope it signals an end to AMIE’s negativity, sniping at poultry producers and the government, rather than working with them to overcome the multiple obstacles to a significant increase in chicken exports.

Huge export potential, huge obstacles

The poultry master plan, of which AMIE is a signatory, envisages a five-fold increase in chicken exports within a decade, turning South Africa into a significant poultry exporter.

Noting that exports in 2019 comprised only 2% of South African production, the plan aims to increase this to 3%-5% by 2023, 7-10% by 2028 “and a growing portion thereafter”.
Unfortunately the master plan has stalled since 2020, largely because of the impact of the coronavirus pandemic, so those target dates may have to be shifted.

That doesn’t mean the increase is not going to happen. The SA poultry industry plans to be “export ready” by the end of this year, with a significant increase in poultry exports in 2023. Most of that is likely to be cooked meat, for which there are markets in Europe, the Middle East, and elsewhere.

Raw meat is subject to much more stringent food safety regulations, especially in the European Union, and the problem is not so much meeting those requirements but getting the state veterinary certificates to guarantee that they have been met.

It will be a huge task to upgrade and staff these state facilities to enable the high-level testing that enables export certification. The master plan goes into great detail on this, estimating a cost of R152 million for state veterinary infrastructure and R180 million for provincial infrastructure. This is in addition to various testing and staffing requirements, all costing many millions.

There has been talk of a public-private partnership (PPP) to do this. The poultry industry will probably be expected to provide a significant portion of the funding.

Does AMIE’s new-found enthusiasm mean they will put up some of their import profits to enable new export earnings?

A sad tale of export decline

Poultry exports are in great need of a boost. They have declined from nearly 70 000 tonnes in 2016 to just over 50 000 in 2019, when the master plan was signed.

Source: SAPA report based on SARS audited figures.

Since then they have dropped further, and were below 49 000 tonnes last year. Nearly all of these exports go to neighbouring states – Lesotho, Mozambique, Botswana and Swaziland. Only 1.3% went to the United Arab Emirates, one of the targets for export expansion.

No chicken was exported last year to Europe, a potential market for premium-priced breast meat, provided the health certification problems can be overcome. South African poultry would enter Europe tariff-free in terms of its Economic Partnership Agreement (EPA) with South Africa.

It’s a tempting target, but not as easy to attain as chicken importers make out.