Recent global crises – Ukraine War and COVID-19 coming to mind – have disrupted the supply chain, heightening food insecurity risk. And given this, the South African Poultry Association (SAPA) considers this as an adequate clarion call for African countries to build the capacity of local chicken production.
The Poultry Africa Exhibition, being held in Kigali, Rwanda could not have come at a more perfect time. The Ukraine War has illustrated the precariousness of wholly relying on imports to meet domestic food demand (food security) in countries. Specifically, what has surfaced is that the biggest flaw with this approach is that imports are at the mercy of factors beyond the control of either the producers or the buyers. Currently, the two factors importers are contending with are regional instability or COVID-19 pandemic restrictions.
Imagine if Africa sourced the bulk of its chicken from Ukraine, with the War in Ukraine disrupting the global grain supply chain? In what scale of a pickle would countries be?
Capacity for domestic production
The lesson that can be drawn from the global grain supply shortfall is that the only way to ensure the predictability of the supply of chicken is by building sufficient capacity for domestic production. Izaak Breitenbach, the General Manager of the South African Poultry Association (SAPA), shares this viewpoint with chicken producers and authorities responsible for industry oversight in other African countries. This is based on the South African experience.
South Africa: a strong business case
Talking to Farmers Review Africa, Breitenbach says that, in the face of challenges, South African producers have demonstrated that there is a strong business case for increasing local chicken production in African countries. This is given that, noticeably, South Africa has remained immune to recent global supply chain disruption as local production has somehow sustained domestic demand.
A case in point, during riots in July 2021, imports could not come through the harbour and local production filled the void. Moreover, presently, there is no supply shortfall in the country with about 10% vacant capacity. “We currently slaughter less than 21 million birds per week. We have a capacity of slaughtering 22 million birds per week,” says, indicating the local chicken producers’ capacity.
Breitenbach acknowledges that, while meeting domestic demand has not been a challenge, the War in Ukraine has had an indirect impact on chicken prices. Inescapably, an increase in the price of course grain has translated into an increase in the chicken feed price, ultimately the chicken price.
Room for improvement
While South Africa has demonstrated opportunities that can be unlocked to foster domestic chicken production, SAPA is of the view that a huge room for improvement abounds. He says that South Africa’s domestic chicken production capacity should reach a level where reliance on imports is significantly reduced, just as other countries have done successfully. “In the USA and Brazil, less than 1% of chicken products is imported and in the EU only 7% of chicken is imported. Currently, in South Africa imports constitute about 24% to 30%. Thus, the gap can be met by utilising the 9.3% unused production capacity.”
Tackling the issue of dumping practices and illegal trading
In pursuit of increasing local production, one of the barriers that should be addressed urgently is the issue of dumping practices and illegal trading. Importation of cheap chicken portions, way below market prices, from overseas countries, is has been undermining the stability of local producers as they cannot compete. This lopsided playing field has been the industry’s biggest concern.
Looking ahead, it is the association’s position that it is high time the government put its foot down and makes deliberate decisions that alleviate the burden poultry farmers carry. “The government can alleviate the burden poultry farmers carry by adopting measures to stop the dumping of poultry products in the country. Particularly, there are two ways of achieving this – ensuring that a product is not declared under the wrong tariff heading to dodge tariffs, as well as fining importers that under-declare import prices to reduce the amount of tariff they pay,” explains.
Bullish about prospects
In general, Breitenbach says SAPA is bullish about prospects for the growth of the capacity of local food production on the continent. That is why the association views Poultry Africa as a very relevant platform where ideas can be explored in times like these when the continent is facing an increasing risk of food insecurity, he explains. “It is during events like these where valuable information is shared to improve the competitiveness of the industry and where plans are hatched to improve food security,”
