Industrial equipment in a meat factory. (Image: Getty)
- The South African Reserve Bank has opened a new debate on chicken import tariffs.
- Importers have argued that tariffs are driving up prices for a key source of protein.
- But farmers say feed costs, which soared 22% last year, are to blame.
- For more stories go to www.BusinessInsider.co.za.
South African poultry farmers and importers may agree that chicken prices are on the rise, but not on what is driving up costs.
The South African Reserve Bank’s (SARB) monetary review report for October has sparked a new debate over poultry import duties, pushing the South African Association of Meat Importers and Exporters (AMIE) to request a full review of tariffs.
As tariffs on frozen whole chicken and bone-in cuts have increased between 2013 and 2022, from 27% to 82% and 18% to 62% respectively, the AMIE considers the tariffs to be “just another tax consumers are unable to bear”. .
But, the South African Poultry Association says raw materials, especially feed costs, and other inputs are putting a strain on poultry producers, driving up prices.
For the 2021 financial year, the price of feed increased by 22% while the price of chicken increased by 17%, said Izaak Breitenbach, head of the broiler council of the SA Poultry Association.
He said the biggest cost to produce a chicken is feed, which accounts for 65% of the cost.
“In terms of chicken prices, we haven’t even recovered from the full impact of feed [costs] during the 2021 period,” he said.
“Currently, in 2022, we are still struggling with record high raw material, feed, corn and soybean costs, and this is reflected in the price of chicken meat. We disagree that tariffs were the cause of the price increases,” he said.
According to the SARB, tariffs on chicken products are regressive, given that it is the main source of protein for many low-income households in the country.
Poultry inflation, which rose to 11% in July from 7.1% the previous year, is fueled by both rising input costs and increased import duties.
In his report, he said the recent suspension of anti-dumping duties on chicken imports should help cool poultry prices and he forecast poultry inflation for the last quarter of the year at 8.7%. down to 5.1% in the second quarter of 2023. .
While demand for chicken has grown over the years, local production, especially for certain cuts of meat, remains limited, said AMIE CEO Paul Matthew.
“Imported chicken represents less than 10% of total consumption if mechanically deboned meat (MDM) is excluded, which is vital in the production of processed meat products. said Matthew.
According to SAPA’s annual report, in 2021, South Africa produced 1.91 million tonnes of poultry meat and consumed 2.3 million tonnes, with imports accounting for 19% of consumption, compared to 21% l ‘last year.
In the same year, chicken imports accounted for 18% of chicken meat consumption, up from 20% in 2020.