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EU-SA chicken import wars: Wake up call for Zim

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Wednesday, 22 March 2017

EU-SA chicken import wars: Wake up call for Zim

The South African poultry industry is in serious distress due to the heavy influx of cheap chicken imports mainly from Europe. Recent media reports from the neighbouring country indicate that imports have put a strain on dozens of poultry farmers who feel at risk of losing business amid a threat of job cuts of up to 130 000 along the value chain by December 2017. South African producers are worried that their businesses are being unfairly crippled by imported portions after tariffs on chicken from Europe were removed at the start of 2012. Indications are that since tariffs were removed under a trade agreement between Europe and South Africa, imports of bone-in portions, such as legs and thighs, have tripled to more than 188-million kilogrammes in 2016, according to the South African Poultry Association (SAPA). South African farmers and labour unions also accuse the EU of dumping by selling chicken cuts at below cost, threatening local companies and jobs. EU producers make enough money marketing breasts in their home market that dark meat is sold as a waste product, they say. “Chicken farming is in crisis and on the cusp of collapse,” Kevin Lovell, chief executive officer of SAPA, said recently. “The trigger will be when the banks stop funding. That moment is getting close. Then the industry will shrink permanently.” According to SAPA, Europe’s share of South Africa’s bone-in chicken imports has grown to 80 percent from 0.5 percent in 2012. On the contrary, the neighbouring country’s biggest chicken producers, including RCL Foods Ltd, are cutting 5 000 jobs saying the industry is under threat, media reports say. In one of the reports Mike Schussler, a chief economist at Johannesburg-based Research Company contends that South Africa seems to be paying the price of having one of the most open agricultural markets in the world at a time when countries are adopting more protectionist policies.

Source: www.chronicle.co.zw