Farmers Call for End to Cheap Chicken Imports

SOUTH AFRICA - Local producers are calling for a reduction in poultry meat imports from Brazil, which are selling at lower prices.
calendar icon 8 November 2011
clock icon 5 minute read

South African chicken producers have for the past few months complained that poultry imports, particularly from Brazil, have been killing their business.

According to Business Day, for producers such as Afgri, Astral Foods and Rainbow Chicken, the bottom line has taken a knock. The result is that a few producers and the industry body have teamed up to take action in the form of an antidumping case against Brazilian imports. They accuse Brazil of selling whole chickens cheaper in South Africa than in their home market.

The Brazilians have in turn cried foul and strongly believe they are right, saying they are prepared to take the case all the way to the World Trade Organisation (WTO).

Brazilian poultry association, Ubabef, has claimed the anti-dumping case is political and that South Africa is protecting inefficient producers to the detriment of the millions of people who can benefit from a cheaper protein supply.

In a way their argument is compelling: if they can produce chicken efficiently, affordably and sustainably, why should they not feed the millions of starving people in South Africa and Africa?

According to the South African Poultry Association, in 1999 imports from Brazil reached 11,198 tons; last year the figure ballooned to 193,896 tons. Last year, about 73 per cent of poultry imports came from Brazil. The closest competitor was Argentina with 10.3 per cent and Canada with 7.1 per cent. At this rate, poultry imports are projected to reach an estimated 19.2 per cent of consumption next year.

At the heart of the matter is the lack of assistance from the government, according to Astral CEO, Chris Schutte. He says he has struggled to get Agriculture Minister, Tina Joemat-Pettersson, to look at an e-mail, let alone attend a meeting. In contrast, at the 22nd Brazilian Poultry Congress two weeks ago, both the minister of agriculture and the deputy president of Brazil were in attendance. It is high on their agenda that the poultry industry succeeds and becomes the largest exporter and producer of chicken in the world. Brazil is the third-largest producer of chicken and chicken products.

Business Day reports that there are a few factors in Brazil's favour, including the vast amount of land the country has at its disposal, along with good weather. Add to that a bit of luck – they have never registered a single case of avian influenza – and all the ingredients for success are there.

The Brazilians maintain that the trade partnership with SA can help keep prices stable and could complement the local production of poultry products to secure supply.

Ubabef says total imports by South Africa in the past decade have never exceeded 20 per cent of the total produced in the country.

Ubabef marketing relations manager, Adriano Zerbini, says: "Our market share in SA is not high. We do not want to harm local producers but they need our help to meet demand. If we really were that cheap, wouldn't we have a bigger share of the market?"

Ubabef markets director, Ricardo Santin, says since the public in South Africa has become aware of the practice of injecting chicken with water and still charging by weight for what essentially is water and not just meat, chicken producers in SA have had to change their game plan.

He said: "Brazil does not inject chickens with brine, this is why SA has found itself suddenly uncompetitive.

"The South African market is less than one per cent of Brazil's exports. Brazil exports to about 150 other countries, why would we trade unfairly in just one country?"

The International Trade Administration Commission of South Africa will now test whether Brazil is dumping. That could take up to a year to complete. If either party is unhappy with this investigation, they may approach the WTO dispute panel.

Poultry association CEO, Kevin Lovell, told Business Day South Africa's 'inefficiencies' have nothing to do with injections. In fact, if the standard measurement – PEF, or performance effectiveness factor – is used, South Africa ranks quite high.

He said: "We can always get better but not at a technical level. We do, however, pay more for feed and electricity. In a way, trade in chicken parts has been determined by the US market; they fashioned demand. So to compete with the US, who are subsidised, Brazil is forced to follow their lead and trade in a distorted manner."

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