Poultry industry says US imports could cost 6,500 jobs

The industry could also lose close to R900 million.

South Africa’s poultry industry could lose close to R900 million ($72 million) in turnover and about 6,500 jobs as a result of an agreement to allow duty-free imported chicken from the United States, an industry association said on Tuesday.

The scrapping of 15 years of punitive duties on US chicken imports on Saturday will allow a quota of 65,000 tonnes a year into South Africa. South African Trade Minister Rob Davies said the impact would be manageable.

The local chicken sector has an annual turnover of about 35 billion rand and employs around 13,000 people, according to the South African Poultry Association (SAPA).

“If we had done what we were entitled to do, which is to say we’re not interested in talking about this. More jobs could have been lost,” saidKevin Lovell, chief executive of SAPA.

The agreement will secure South Africa a place in the African Growth Opportunities Act program (AGOA), a trade benefits programme that would give duty-free access to billions of dollars of African exports for the next 10 years.

“There was no easy way out for South Africa. Either you defend the poultry industry or you defend AGOA. We had to find a balance,” Lovell said.

Under AGOA, African products such as cars, base metals, chemicals, citrus fruit, wines and nuts enter the world’s number one economy free of duty.

Davies said the government and the industry were working on minimising the impact of the deal on local producers such as Astral Foods and Quantum Foods.

“We agreed within the framework of the agriculture policy action plan that we’ll work with local poultry producers to create new opportunities for the industry in export markets,” said Davies.

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I have trouble with the numbers. According to the article 6,500 jobs will be lost out of 13,000, which is exactly 50%. SA produces over 1.2 million tons of chicken (2010 statistic), so the new US import is around 5%, but according to this article half the jobs will be lost because of it. Something does not add up.

Kevin Lovell has been fighting a losing battle over his protectiveness for the poultry industry in this country. SA chicken are awash with brine and in some cases exceed 35% of mass. In Europe it is illegal to brine chicken by anything more than 12 to 15%. The Americans don’t brine their chickens so it will be a bonus to buy American chicken portions. The Americans are not big eaters of chicken parts other than the breasts (this seems to be at variance with places like KFC) so imports will be restricted to drumsticks. thighs and wings. If Lovell and his crowd had insisted on their rules we would as a country have lost all protection on car, wine and fruit exports which are billion dollar industries – so we need to suck it up, alternatively the poultry industry should reduce the level of brine to international standards improve quality (we do not export chicken into Europe because of the levels of brine) and then we can export. Somehow I doubt whether the poultry industry would want to export they have sufficient customers in RSA whom they can rip off

I guess they have to find some way to pay for all that expensive brine they use in their frozen chicken – at somewhere in the region of about R30.00 out of the R100.00 price per average 5 kg bag it must be something special.

End of comments.





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