According to World Top Imports, South Africa spends an average of US$93.4 billion on imports yearly. A large chunk of this amount goes into the importation of chicken.
As expected, the importation of chicken affects the local poultry industry in no small way. Over 90 percent of chicken imported in South Africa is brought in from Brazil through the South Atlantic Ocean.
In a bid to discourage the importation of chicken from Brazil, the South African Poultry Association has asked the government to increase import tariffs on the product.
The association is asking the International Trade Commission of South Africa to increase import tariffs on chicken from Brazil to 82%.
After close deliberation, the Department of Trade and Industry announced that it would announce a decision on the issue by the end of August 2019.
They have also promised to roll out a master plan that will “reinvent, reinvigorate, and even reposition the South African poultry industry.”
In the meantime, they have invited all stakeholders of the supply chain to deliberate on sorting out their differences.
However, the government, through the Trade and Industry Ministry, is proposing a different approach that doesn’t affect chicken importation from Brazil. The proposition may be due to diplomatic ties.
Trade and Industry Minister, Ebrahim Patel has put the application for an increased tariff on hold. He insists that local and foreign producers agree on a “chicken master plan”.
Government has convened a meeting of local poultry producers and importers to map out a strategy for the sector.
This occasion is not the first time the South African government has promised to unveil a master plan.
The development of master plans in the poultry sector is part of a series of master plans developed across priority industries in the country.
The presidency said in a report last year that President Cyril Ramaphosa has created a re-imagined industrial strategy for South Africa.
Government has put forward some questions to be answered by stakeholders of the poultry industry before considering the increased tariff.
- How can local producers leverage the importer infrastructure and know-how to kick-start the process?
- How does SA rekindle its relationship with trading partners and the agreements already in place?
- What is a better benchmark than import prices to define the cost of local supply? And
- What is the plan for transformation?
What are your thoughts?
Header Image Credit: Business Mirror