The poultry market is being destroyed by cheap imports

News Guy
September 5, 2016
1017 Views

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The South African poultry industry is being crippled due to the influx of cheap chicken imports that have flooded the market.

Stakeholders have given the industry a lifespan of 12 to 18 months should imports continue at the current rate.
This week, Rainbow Chicken which falls under the RCL Foods group, released their annual financial results reflecting an 11.9 percent decrease in headline earnings. Credit: SUPPLIED

This week, Rainbow Chicken which falls under the RCL Foods group, released their annual financial results reflecting an 11.9 percent decrease in headline earnings.

The company’s managing director, Scott Pitman, told the Sunday Tribune that the main reason for the decrease was the import of chicken quarters, mainly from Brazil and Argentina.

“Africa is the only continent left for these countries and the EU to dump leg quarters (bone in). Russia has banned all poultry imports and China is focusing on developing their own poultry market.

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“This leaves us as their only target,” said Pitman.

He said chicken landed in Durban at a cost of R12-R14 a kilogram, which resulted in a massive surplus for the local market and left them unable to compete.

Over a period of 24 months, imported chicken has more than halved the production of individual quick frozen (local chicken) from 600 tons, to 260 tons a day.

Detrimental

“The imports are retailing at 30 000 tons per month which is far more than what Rainbow Chicken retails in a month. There is now an oversupply of chicken which has had a detrimental effect on the market,” he said.

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Pitman believes that a restoration of normal trading conditions is required for the poultry industry to survive.

“This industry will die in the next 12 months if we do not impose quotas on the number of imports.The market is suffering and this is the only way we can help cure it,” he said.

“Most African countries have banned chicken imports to protect their own industries while other countries around the world use non-trade health standard barriers to achieve the same end,” said Pitman.

The African Growth and Opportunity Act (Agoa ) between the US and SA was renewed earlier this year, after prolonged negotiations.

Source: IOL.co.za

Read the full story here: http://www.iol.co.za/business/news/feathers-fly-off-local-chicken-market-2064255

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