January 31, 2017

South Africa fears collapse of chicken sector due to import influx from EU

South Africa fears a collapse of its chicken sector if something is not done to stem the "influx" of imported dark meat from Europe.

Trade and Industry Minister Rob Davies said that unless cheap imports are controlled, domestic producers' efforts to become more competitive would be useless, Bloomberg reported.

Since tariffs were removed five years ago under a trade agreement between Europe and South Africa, imports of bone-in portions, such as legs and thighs, have tripled to more than 188 million kilogrammes in 2016, according to the South African Poultry Association.

"The competitiveness issues are there, we have to work around those with the industry," Davies told Bloomberg recently.

"But they're not going to be solved if we just allow an influx of spare parts from around the world to come in to take over the market", he added.

South African producers complained that they were being unfairly undercut by imported bone-in portions after tariffs on chicken from Europe were removed at the start of 2012. They said European consumers' preference for chicken breasts meant that the continent's producers had an abundance of legs, thighs and wings that they could sell cheaply in Africa.

"We definitely have distress, there's no doubt about it," Davies said. After South Africa imposed a temporary 13.9% duty on European imports in December, EU Trade Commissioner Cecilia Malmstrom wrote to Davies, saying that the country's "structural problems" were more to blame for the industry's problems than competition from Europe.