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It’s no secret that South Africans love their chicken, and poultry is one of the more affordable sources of animal protein, but enjoying a bucket of fried chicken is becoming costly.
Dr Sifiso Ntombela, the chief agricultural economist at the National Agricultural Marketing Council, attributes the increase in prices to the exchange rate weakening just before the start of lockdown and new poultry import tariffs gazetted in March.
Import tariffs on frozen bone-in chicken portions rose from 37% to 62% (a 25% increase), while those on frozen boneless portions jumped from 12% to 42% (up 30%).
The tariff escalation limited the availability of cheaper imports in the country, says Ntombela.
It serves to protect the domestic poultry industry from the importation of cheaper poultry products from global competitors. However, local producers were hit by the exchange rate. As Ntombela points out: ” … the devaluation of the rand impacted the cost of inputs used in the chicken industry such as soya oilcake.”
Disruptions in domestic and global agri-food supply chains caused by Covid-19 regulations also limited the processing and distribution of chicken, which contributed to the price acceleration and threatened households’ ability to access the meat.
Lockdown dampened demand
According to Izaak Breitenbach, general manager of the Broiler Organisation at the SA Poultry Association (Sapa), the lockdown created an approximate reduction in demand for the meat of 18% under alert Level 5 and of 13% under Level 4. At present, it is down by 7%.
It is mainly due to restaurants being closed and consumers having fewer takeaway meals during this period.
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