South Africa is missing a huge opportunity to export poultry to the EU because it does not meet the trading bloc's health and safety standards.
This was according to the South African Association of Meat Importers and Exporters (Amie) CEO Paul Matthew who was addressing a webinar on Thursday to explore how the country could develop a poultry export market as quickly as possible.
According to Amie and trade experts, the creation of a robust, successful poultry export market for local products would bring value to the entire supply chain, from local producers and shareholders, to medium and small-scale farmers, exporters, processors and consumers. However, the country is missing a huge opportunity because it does not meet the EU’s poultry import standards.
“In 2019, all parties, including the local industry, importers and government signed and agreed to a Poultry Master Plan. One of the key requirements of the plan is for the SA poultry industry to grow the export of local products. While there is enormous opportunity to do so, there is very little progress in this regard,” Matthew said.
He added that for SA to export poultry, there was a checklist that needed to be urgently tackled. This included gaining access to countries with which SA has preferential trade agreements, meeting international health and safety standards, and reorientating producers’ operations to extract value from certain poultry cuts for markets that will pay a premium.
Matthew said Amie would establish a dedicated export task group to facilitate access to export markets and provide processing capacity for cooked poultry products, which are especially desirable in the EU.
“We are eager to work with our partners in government and with local producers to fast-track our country’s export potential. Government plays a critical role in securing the necessary trade conditions for export, and local producers will need to urgently resolve the health and safety challenges required to meet the standards of potential export markets,” Matthew said.
Donald MacKay, founder and CEO of XA International Trade Advisors, said the country was missing huge export opportunities because it was not ready to export.
“The EU imports 900 000 to one million tons of chicken breast per year and it was buying that breast for about six euros per kilogram in March 2022. South African producers, who have a surplus of chicken breasts, are selling their breasts locally at a third of that price, so the upside for local producers is enormous,” MacKay said.
He added that SA had duty-free status in the EU.
“The EU has already said that it will buy SA product once the country meets the required health and safety standards,” MacKay said.
SA also has favourable, zero-duty trade conditions under the African Continental Free Trade Area (AfCFTA).
South Africa does export many agricultural products successfully, notably citrus, which like chicken needs to meet the health and safety standards set by export markets. In 2021, SA exported 1.5 million tonnes of citrus, fetching R15.9 billion in export value. In contrast, the country exports just 26 000 tonnes of chicken per year (1.8% of the size of the citrus market), with an export value of R622m (3.9% of citrus’s value).
MacKay said that by getting health and safety standards on track, SA could vastly accelerate its entry into the EU market, making access to other global markets relatively simple.
The EU will only import chicken products that are free from antibiotics, hormones, brine, and feed that contains animal byproducts.
“While the local industry is technically efficient in producing product for the South African market, and perhaps becoming more so as it mechanises its operations, it will need to rethink its strategy to succeed in the global market,” Matthew said.
Chicken breast meat fetches a premium in Europe, while wings and chicken feet fetch a premium in the US and China respectively. However, South Africa cuts up a whole chicken and puts it into a bag, selling all the pieces at the same price.
“There is enormous upside economic value if local producers reorient their operations to extract value from product preferences and price premiums in the different markets,” Matthew added.
