ZIMBABWE - As South Africa rushes to meet demands that it opens up for poultry imports from the US, Zimbabwean chicken producers are worried over illegal imports from the continent’s number two economy, with an association of chicken producers saying the value of imported poultry products from South Africa had surged to $800 000 in the nine months to September, Tawanda Korombo writes.
The US has given South Africa up to March 15 to start allowing its chicken products into the continent’s number two economy or risk being ruled out of the African Growth and Opportunity Act. If excluded, South Africa will face trade restrictions from the US, a major export destination for its agricultural produce.
The fall-out will also affect South Africa’s neighbours such as Swaziland, with Christopher Fakudze, an economist in Swaziland being quoted by APA saying “South Africa will reduce absorbing agricultural products from Swaziland and other Southern African countries” should it fail to meet the March 15 deadline imposed by the US.
South Africa is apparently facing pressure from poultry producers in the country who are complaining that the US poultry imports into the country will eat into their market share.
South Africa is Zimbabwe’s biggest trade partner and Harare is heavily reliant on its southern neighbour for most of its finished products and other commodities. The two countries have however squared off over chicken imports into Zimbabwe, with President Robert Mugabe’s government moving in to ban chicken imports from South Africa to boost local producers.
Despite the imposition of high import duties and the move to ban poultry imports, chicken products amounting to 1.5 million kilogrammes were imported into Zimbabwe from South Africa in the nine month period to September 2015, an update by the Zimbabwe Poultry Producers Association shows.
There are concerns that a greater percentage of the chicken imports from South Africa could have been grey imports, a move that had prejudiced the cash-strapped government of as much as $2.2 million in import duty revenue.
“According to the SARS dataset, between March and September 2015, an average of 196 tonnes of chicken have entered the country each month. The formal broiler market absorbs approximately 2,500 tonnes. These imports therefore represent eight percent of the formal broiler market and hence the impact on the sector,” Solomon Zawe, chairman of the Zimbabwe Poultry Producers Association (ZPA) said.
According to the ZPA’s estimates, illegal chicken imports into Zimbabwe for the nine month period can be broken down as follows; 178,392 kg in January; 303,314 kg in March; 276,254 kg in April. The association cited revenue documents from the South African Revenue Services (SARS), which further account for grey chicken imports from South Africa as: 201,316 kg for May, 159,398 kg for June, 280,636 kg in July, 52,280 kg and 98,408 kg for August and September respectively.
“The average price per kg of $0.52 suggests that the product is being under-declared or is time-expired,” added Zawe.
Zimbabwe, just like other African countries such as Nigeria, is engaged in efforts to prop up local chicken producers. However, imports, often illegal, are hurting such efforts, prompting Nigeria to destroy thousands of seized tonnes of frozen chicken products illegally imported into the west African country in the past few months.
Imported chicken products in Zimbabwe comes mainly from South Africa and Brazil and officials say the Zimbabwean poultry sector is now dominated by smallholder and backyard producers. In July last year, the Zimbabwean poultry industry lowered chicken prices by as much as 23 per cent to fight the imports from Brazil and South Africa, with the government also subsequently introducing an import duty of $1.50 for poultry products imported into the country.
Chicken producers in Zimbabwe and the region are bracing for a tough year ahead, which is likely to see feedstock prices go up because of drought conditions occasioned by the El Niño dry weather phenomenon that Sub Saharan Africa is grappling with. Experts say competition for scarce corn and other crops for human consumption and for usage in feed-stocks for livestock production will result in higher prices and lengthy shortages in severe cases.
Top image via Shutterstock