Chicken prices have seen sharp increases over the past few years with no signs of slowing. In the past year alone, the price of frozen chicken portions has risen 9% on top of the 12% price hikes seen in 2021.
Additionally, poultry contributed a staggering 12% to total food inflation this year, compared to beef at 8% and fish at 2%, as reported by the Bureau for Food and Agricultural Policy (BFAP).
“No one can fault the local industry for increasing prices, as producers are facing surging input costs. We have seen record high fuel prices, an erratic energy supply, poor water quality and supply, and sharply escalating farm feed prices which contribute approximately two-thirds to the cost of producing chicken,” notes Hume.
“Additionally, local chicken producers can only supply so much. So, considering the price pressure they’re under, assistance must come from the import sector, which is facing considerable challenges of its own in the form of global supply chain constraints.”
“But without these imports supplementing the local market, we cannot ensure ongoing food security in the country or protect against price hikes, which will both impact vulnerable low-income households first.”
Suspending tariffs to aid industry recovery
According to the South African Poultry Association, Brazil was South Africa’s most important poultry trading partner in 2021, while America came in second through providing 15.6% of all chicken imports, or just over 60,000 tons.
Furthermore, BFAP reveals that imports make up 22% of South Africa’s poultry consumption, pointing to the significance of imports for bolstering the poultry industry. This year alone, Hume International has imported more than 132 million kilograms of frozen food through its global network spanning 27 countries, and the company notes that it has seen its import costs soar.
To offset these soaring prices, Hume therefore emphasises that government must continue to keep tariffs as low as possible and raise restrictions on maximum import quotas. For example, import duties currently total 60% for bone-in chicken from America.
“A temporary suspension is by no means unprecedented. Earlier this year, after strong urging from the industry, government suspended duties for Brazil, Denmark, Ireland, Poland, and Spain.
“The South African consumer is already battling major budgetary constraints amidst soaring costs of living. So, to combat food inflation on crucial foodstuffs such as chicken, government also needs to consider suspending tariffs levied against America. This, together with raising import quotas, could make an enormous difference in preventing prices from escalating even further.”
