South African government responds to poultry crisis

By Oscar Rousseau contact

- Last updated on GMT

With too much chicken on the market, South Africa's poultry industry is in crisis
With too much chicken on the market, South Africa's poultry industry is in crisis

Related tags: Africa

South Africa’s Department of Trade and Industry (DTI) has begged meat processors not to close plants or cut jobs as the response to the poultry “crisis” makes progress.

A government-led task force set up to “deal with the crisis in the domestic poultry industry​” has developed a collective action plan to support South Africa’s beleaguered chicken sector. This represents “significant progress​” said the government, which has begged the industry not to close factories or slash jobs to reduce costs.

The poultry industry is under intense pressure, with bloated oversupply in the domestic​ market exacerbated by record levels of dumped imports from South America, the US and EU.

Some of the country’s biggest poultry processors, including RCL Foods and Astral Foods​, last year issued gloomy profit warnings as chicken supply surged past domestic demand.

Trade interventions likely

With profits for a number of businesses expected to fall, the government recently stepped in to set up a poultry task force.
 
This is comprised of DTI representatives, alongside peers from the departments of Economic Development and Agriculture, Forestry and Fishing, as well as a representative from the government-owned Industrial Development Corporation. The South African Poultry Association (SAPA) represents business, while the Food and Allied Workers’ Union represents labour.

The task force has discussed interventions on trade, meat safety, competitiveness, industry growth and transformation, and industry financing. No concrete plans have been yet been made public.
 
A set of short-term recommendations will be submitted for ratification to lift the beleaguered industry out of the crisis, but the DTI could not be reached to confirm when these proposals will be ready.

Until these proposals have been submitted to ministers and can be implemented, the government has asked the industry not to close meat factories or cut jobs.

Comment from SAPA could not be obtained at the time of writing. RCL Foods declined to comment.

Related topics: Industry & Markets, South Africa, Poultry

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1 comment

Big Cryout

Posted by Fabio Nunes,

SAPA, every now and then, uses the strategy to blame the chicken imports from US, Brazil and EU, or dumped imports, as the articles says, for the poultry crisis in its domestic market.
Chicken imports from US, Brazil and EU are cheaper, therefore more attractive to consumers than SA chicken, because these countries are more competitive in poultry production than SA. Instead of the cry-out, SA should try to learn from these countries.

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