August 29, 2013

South Africa's poultry producers seek import protection

With imports of some poultry cuts from Brazil and Europe hurting the local industry, the South African Poultry Association has asked the International Trade Administration Commission of South Africa to raise duties to as much as 82% from the current 5-27% range.

South African poultry producers, led by the country's largest, Rainbow Chicken, are calling for protection from cheap imports as profits for domestic producers continue to drop.

Rainbow Chicken recently reported a 94% drop in annual profit, with net income dropping to ZAR16.7 million (US$1.6 million) in the 12 months ended June from ZAR266.8 million (US$26 million). Even the acquisition of food manufacturer and distributor Foodcorp in May could not revive the deficit.

"Rainbow has experienced an extremely difficult year with high import volumes and record feed input decimating margins," the company said in a statement. "The poultry industry is at crisis point and anti-dumping protection is key to the survival of the industry."

Rivals Afgri and Astral Foods also announced lower than expected earnings. Afgri forecast year-end earnings to fall as much as 34%. The drops have been attributed to government delays in addressing more import tariffs and anti-dumping initiatives.

However, the Association of Meat Importers and Exporters, a local meat-trading lobby group, warns that increasing duties will drive up food costs for local consumers.