Chicken could soon cost you more – here’s why

Chicken prices could soar if punitive tariffs are implemented again in August, following a 12-month halt.

When announcing the pause a year ago, the Department of Trade and Industry said the break was meant to ease the pressures of rising inflation on consumers – giving them much needed breathing room.

Warning against a possible hike on chicken prices, Managing Director of Hume International and expert Fred Hume said poultry tariffs were “astronomical.”

“Duties on imports from some of the country’s most important poultry trading partners will once again hit local pockets at a time when many South Africans are buckling under severe pressure,” said Hume.

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Eliminating threat, alienating consumers?

Meanwhile, South African Poultry Association (Sapa) general manager, Izak Breitenbach said the biggest threat to SA’s poultry industry is unfair trade practices from countries like Brazil, Ireland, Spain and Denmark “which dump their product on South African shores”.  

Breitenbach said the industry has been affected by load shedding, rising fuel and feed costs, alongside a “less than desirable” exchange rates.

“Yet despite these challenges, the industry still produces the cheapest chicken our Rands can buy,” he said.

Breitenbach said the landed cost of imported chicken from Brazil costs around R9.00 per kilogram, while locally grown chicken sells for nearly R30.50 – three times more expensive than imported chicken.

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‘More harm than good’

Despite recognising the need for chicken tariff duties to address the negative impact of dumping on the ability of local producers to compete in the market, Hume said the duties are likely to cause “far more harm than good.”

“South Africa cannot expect to export with low or no duties, while imposing absurd duties on our import partners,” he said.

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Here are some of the gazetted anti-dumping tariffs on chicken imports from some countries:

• Brazil – 265% in addition to the 62% tariff already in place.
• Ireland – 158.4% additional tariff.
• Poland – 96.9%
• Spain – 85.5%
• Denmark – 67.4%

“Reciprocal trade benefits all market participants, from producers and sellers to consumers and even the government, which benefits from increased tax revenue due to enhanced supply,” said Hume.

He said unreasonably high anti-dumping tariffs have caused countries like Netherlands and Ireland to sell their chicken to “more attractive and commercially viable international markets.”

Scarce chicken, high prices

Hume warned high tariff duties will likely result in chicken supply shortages, as already evident in the scarcity of chicken wings and leg quarters.

Since scarcity drives up costs, Hume said new duties could cause a hike in the price of chicken – hitting consumer pockets hard.

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