“Whoever wishes to foresee the future must consult the past.” – Niccolo Machiavelli
In 2024, South Africa experienced significant political and socio-economic events. Politically, the African National Congress (ANC) lost its parliamentary majority for the first time in 30 years during the May elections, reflecting widespread frustration over corruption, unemployment, and energy crises. This shift brought opposition parties like the Democratic Alliance (DA) and Economic Freedom Fighters (EFF) into prominence.
Economically, the country saw a mix of progress and challenges. Efforts to grow the economy and create jobs were bolstered by over 250 days of uninterrupted power supply, thanks to improved maintenance by Eskom, increased renewable energy capacity and collaboration with industry.
The consumer inflation rate in South Africa fell to 2.8% in the third quarter of 2024, marking the lowest rate in four years. However, the agriculture sector dragged overall economic growth into negative territory in the third quarter.
The South African poultry industry has experienced significant events in 2024, shaping its landscape and impacting traders, producers and consumers. Here are the key highlights:
Avian Flu Outbreaks
The global industry faced recurring outbreaks of Highly Pathogenic Avian Influenza (HPAI), which led to production losses and subsequent price hikes. These outbreaks have highlighted the need for better biosecurity measures and industry preparedness.
Regionalisation and Heat Treatment Policy Inconsistencies
Fred Hume, Managing Director at Hume International, has highlighted the double standards in South Africa’s regionalisation and heat treatment policies for poultry imports. These policies have led to staggering price inflation for poultry over the course of this year.
Diminishing Market Access
There is also a growing concern over the industry’s diminishing market access for imports, potentially leading to higher prices and supply shortages, with additional markets recently closed due to HPAI outbreak.
The Department of Agriculture, Land Reform & Rural Development (DALRRD) recently issued three new poultry trade restrictions for New Zealand, Denmark, and the Netherlands due to HPAI outbreaks.
Other countries currently restricted due to HPAI include the United Kingdom, Israel, Germany, Hungary, France, Zimbabwe, Belgium, Sweden, Canada, Chile, and Australia.
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A lack of veterinarians has affected the ability of our chicken farmers to keep healthy flocks. The result is a decrease in the volume of exports to countries with high phytosanitary standards, such as the EU.
Port Delays
This year, meat and poultry importers have encountered significant logistical and procedural delays at our ports, with the Port of Durban being particularly affected. The primary issues contributing to these delays are the inconsistencies in the product release process and the protracted lead times for processing the necessary paperwork to release containers.
Export Challenges
Looking at the latest year-on-year trade statistics from SARS, there has been a decline of 6.25% in South African-origin chicken exports, with bone-in chicken still being the leading poultry export commodity.
Although there are explorations into export opportunities for breast meat to the European Union (EU), the United Kingdom (UK), and Saudi Arabia, local production capacity must first be sufficiently developed.
VAT-Free Chicken Proposal
The South African poultry industry together with the Association of Importers and Exporters (AMIE) is pushing for the removal of the 15% value-added tax (VAT) on chicken products, with an announcement of the government’s decision expected in early 2025.
Growth Potential
Between 2024 and 2030, South Africa’s poultry market is projected to grow by 5.8% annually, driven by rising demand from households and the food service sector. Despite challenges such as high feed costs and power supply issues, opportunities exist in value-added products and innovative farming practices.
Emerging Farmers
Small-scale farmers have made significant strides in the poultry industry, exploring opportunities in alternative feed sources like seaweed. These innovations are helping to diversify the industry and reduce reliance on traditional feed.
AMIE Academy
The transformation initiative under the banner of the AMIE Academy shows promise, but it focuses specifically on trading not only poultry, but all meat products. However, it exemplifies how the industry can make a change when funding is applied with the right goal in mind – a net positive impact and sustainable development.
These events underscore the dynamic and evolving nature of the poultry industry, reflecting both challenges and opportunities. As the industry adapts to these changes, it is clear that both poultry imports and local poultry production continue to play a vital role in ensuring food security and economic stability in South Africa.
