South Africa needs to ramp up its poultry exports, Izaak Breitenbach, the CEO of the South African Poultry Association (Sapa), said yesterday.
The country currently exports 26 000 tons of chicken per year, with an export value of R622 million.
Speaking at a webinar yesterday, he said the poultry industry strategically had to export and it was committed to doing that.
Sapa would also would like to see a revision in trade measures as the report had been done by the International Trade Administration Commission (Itac) and was on Minister of Trade, Industry and Competition Ebrahim Patel’s desk.
“He needs to talk to that,” Breitenbach said.
In August Patel suspended poultry anti-dumping duties for 12 months amid a cost of living crisis in South Africa due to high inflation, among other factors.
The webinar was assessing the impact of the Poultry Master Plan thus far.
Breitenbach said new statistics showed that the plan had created R2.4 billion in investment and 2 600 new jobs.
The industry had also seen a 10% increase in the total amount of chickens being produced in the industry.
“In the past two years we managed to establish 18 new contract farmers at the value of about R1 million per farm. So these are big producers, big businesses that are successfully being established amongst black farmers. During this period we managed to train in excess of 1 000 people and the turnover is estimated to have increased by about R2 billion on the R50 billion turnover per annum that we do have in the industry.”
Breitenbach told the webinar, “We are a competitive industry and have been supplying cheap chicken to the industry since 1904.”
The biggest impediments to improved exports were phytosanitary and disease measures.
For example, South Africa poultry producers had to vaccinate for Newcastle disease and that prohibited the country from exporting frozen meat to the EU.
Breitenbach said in the past two years they had been working on a plan to export cooked product.
“When we export cooked product we negate the fact that we need to comply with Newcastle requirements, highly pathogenic avian influenza requirements and so forth,” he said.
“When exporting cooked or partially cooked meat we only need to comply with the residues that we test for. Those are the residues of growth hormones, minerals and so forth. So that is what changed and makes it possible for us to access the markets.”
Donald Mackay, the CEO of XA Global Trade advisers, said South Africa, for most sectors, did not have an export-first way of approaching things.
“We tend to look at the local market, produce for it, if we have access move into the export market. That whole way of thinking is becoming problematic. We have an economy that is essentially stalled. It has been hard to grow this market for quite a while, which means exports become extremely important,” Mackay said.
But he said South Africa was a competitive producer.
“If I look at Europe, for example, it would like to diversify its supply of chicken breast and there is a very large price premium to be obtained for getting into that market whether the product be cooked or uncooked, there is value in getting into the market. It is encouraging that we are looking at that.”
Mackay said that the way of thinking around exports had to be a little different from global producers.
South African poultry producers faced several challenges such as load shedding, infrastructure issues including deteriorating road infrastructure and an unreliable water supply, as well as crime.
But the duties that the government had placed on dumped chicken gave local producers some protection to kind of hide behind, he said.
Mackay said despite the fact South Africa had duty-free access to the EU, it still had to compete with other countries, which meant it was exporting the infrastructure that does not work, the electricity that does not work and those costs were proving a competitive hindrance.
“It is essential for the long-term survival of the industry that we sort out the export problem. But to do that, government has the most important role to ensure that the economic basics are in place, ports work, as well as the roads and electricity to get a truly competitive chicken sector,” he added.
Small-scale poultry farmer Amanda Mdodana said the growth of a day-old chick depended on the heat they could provide for brooding purposes.
“So a lot of losses were caused by the small-scale farmers who saw a lot of their chicks dying in the first three weeks. At the end of the day we have to spend more money to be able to handle the current challenges with load shedding,” Mdodana said.
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