African Poultry Wrap: Output Takes Knock in Southern Africa

AFRICA - Zimbabwean and South African chicken producers have seen a decline in poultry production in the past month while in west Africa, Nigeria and Ghana have continued to be affected by illegal imports that are impacting on local producers, with Ghanaian producers pushing for a higher tax on chicken products shipments into the country. Tawanda Korombo reports for The Poultry Site.
calendar icon 25 November 2016
clock icon 5 minute read

Poultry production is being viewed as a low hanging fruit in Africa, with most countries still held back in terms of fully utilising their capacities and failing to satisfy demand. Some of the is being taken up by imports while smuggling has also become rife.

One such country that could flex its operations to boost poultry production is Namibia, whose industry is still growing. According to reports, the country mainly relied on imports until 2012 for chicken and other poultry protein sources.

The government has come up with restrictions on imports and this has boosted capacity but current production is still unable to meet monthly demand of about 3,500 tonnes of chicken meat and eggs.

The Namib Poultry Industry, its biggest producer of chicken products is only managing about half of the demand in the country, with legitimate imports accounting for nearly half of the country’s aggregate demand.

“Opportunities in this industry are at two levels. The first level is to enter into broiler production. This requires large investments as it is capital intensive,” said Maria Lisa Immanuel, the senior trade and investment policy analyst at the Namibia Trade Forum.

“Feed cost takes up to 60 per cent of total production cost or more. Unfortunately, Namibia is a net importer of feed. Poultry feed production could therefore also be a positive spin-off in this industry,” she added.

Zimbabwe struggles to meet demand

Just like in other African countries such as Zimbabwe, South Africa, Zambia and Malawi, there is surging demand for indigenous poultry. In Zimbabwe, the industry has also been struggling of late, with the nine month period to end September 2016 seeing suppressed production for both eggs and chicken meat.

The situation has become even dire because of the economic decline in the country and the Poultry Producers Association of Zimbabwe reckons that a further decline in broiler meat production from 116,000t achieved during 2015 to 115,000t this year is possible, which will significantly impact on producers’ ability to meet demand.

Production of day old chicks has been flat compared to the same period last year while latest statistics show a surge in imported poultry tonnage from neighbouring South Africa to 800 tonnes. South Africa – which stands to be less impacted by poultry products shipped from the United States according to a study, has also been characterised by waning fortunes for poultry producers in the country.

South African poultry business results lower

Astral Foods, one of the major poultry producers in South Africa said in November that headline earnings at $26.3 million had been down by 52 per cent for the 2016 full year period, dragged down by higher feed costs which had a "major negative impact" on financial performance.

The poultry division was particularly hit, with earnings significantly falling and the outlook, according to the company, is not looking good. "The weakened state of consumer spending unlikely to improve due to poor economic growth and higher unemployment which will continue to constrain an increase in the per capita consumption of poultry," it said.

Despite the problems most producers are facing in Africa, others are seeking to further invest in the poultry industry to boost productivity, with Zambeef Products recently raising $65 million in capital investment from the United Kingdom’s Commonwealth Development Corporation (CDC). The funds will be used to prop up its poultry producing divisions in the country.

West African countries try to fight imports

But in West Africa, the war against illegally imported poultry products appears to be faltering, with the Poultry Association of Nigeria (PAN) saying as many as 1.2 million metric tons of poultry products are imported into the country each year.

However, despite the threat of imported eggs and chicken meat, Nigeria is among the top producers of chicken eggs, with output at about 10.3 billion eggs per year.

Across the border in Ghana, a new report on the poultry sector showed at the end of November that there are growing calls for a big tax on imported poultry products to promote the local industry.

It also shows that more than 80 per cent of broiler farms in the country are operating on a small scale basis, with constrained output of around 2000 birds each per year. “The size and scale of production and processing in Ghana suggests that the industry cannot succeed in a head-to-head competition with imports,” the report further states.

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