Brazil, the world’s largest chicken exporter and the source of most of South Africa’s chicken imports, is trying to avoid being cut off, if and when bird flu breaks out in that country.
Brazil is ringed by countries where bird flu has spread and, as the virus is carried by wild birds, it may be only a matter of time before Brazil, too, is affected by the disease. The SA Poultry Association (SAPA) reports that Brazil is already making plans to deal with that eventuality.
South Africa has applied complete poultry import bans on countries that have reported bird flu outbreaks. That, until recently, has included all 10 of the European countries licensed to export to South Africa, and Argentina has just been added to the list.
Now Brazil and Argentina are seeking to negotiate exemptions from the ban, particularly for mechanically deboned meat (MDM) – a paste used in the manufacture of processed meats. MDM is by far the largest component of chicken imports from Brazil and is a huge revenue earner for Brazilian producers – in 2022, MDM accounted for R1.9 billion of the R3.3bn poultry imports from Brazil.
All of that is at risk because of spreading bird flu. That is why Brazil and Argentina have approached the South African Department of Agriculture, Land Reform and Rural Development (DALRRD) to see what they can negotiate. SAPA says that local poultry producers and importers have been party to the discussions.
A proposal that MDM be cooked prior to export was rejected, and the suggestion that imports of raw MDM be allowed subject to a promise that it would be cooked was viewed as too risky.
That leaves the possibilities of heat treatment before export, or permission to export chicken products from geographic compartments that are free of bird flu. These issues will be considered in the next round of negotiations.
While the overriding considerations are food safety and the need to prevent the virus being imported, South African negotiators will be aware of the wider trade implications. Any agreements they reach with Brazil will set a precedent, and are likely to be followed by similar applications from other countries subject to bird flu bans. That is going to ensure a lot of interest in the outcome.
Bird flu alert after Western Cape outbreaks
Outbreaks of avian influenza (bird flu) at two egg-producing poultry farms in the Western Cape may be an unwelcome harbinger of worse to come.
Despite the worst global outbreak of the disease, South Africa has been relatively free of bird flu in recent months, and the Western Cape has not seen the virus in commercial poultry since early last year.
Now outbreaks on two layer farms in the Paardeberg area, north of Paarl in the Western Cape have resulted in the culling of 120 000 birds. The Western Cape is a significant egg producing area and layer farms suffered badly in the previous bird flu outbreak.
The poultry industry will be on high alert, not only in the Western Cape, but nationwide. South Africa is entering the winter months when the virus is most prevalent. Farmers could face huge losses because, unlike other countries, the government does not pay compensation for healthy birds ordered to be culled to prevent the spread of the disease.
In 2021 and 2022, nearly 3.8 million chickens were culled because of bird flu outbreaks. Most (2.9 million) were on layer farms, while 858 000 broiler birds were culled.
In an interview with the TV station Newzroom Afrika, Dr Mpho Maja, Director of Animal Health at the Department of Agriculture, Land Reform and Rural Development, stressed that the outbreak was limited and there was at this stage no need to panic. “It’s not a crisis and I do not anticipate that it will affect food prices,” she said. She emphasised the need for poultry farmers to take all necessary precautions and ensure that biosecurity measures were adhered to.
Electricity price hike the latest shock for farmers
A steep rise in the price of electricity is the latest blow to South African farmers who have battled unreliable power supplies, escalating to daily power cuts this year. Some farmers have gone bust; others have survived by investing large sums of money in diesel generators.
This has added to a steep rise in input costs such as feed and fuel following Russia’s invasion of Ukraine in 2022. And now, on top of that, come huge increases in the price of electricity.
Eskom, the national electricity utility, has been granted price increases for 2023 that start at 18.65% for the customers it serves directly. For those who buy electricity from municipalities, the increase will be higher, because municipalities make much of their revenue from on-selling services like electricity and water.
Direct supply increases went into effect on 1 April, municipal price hikes will be imposed on 1 July.
The April increases are already hitting livestock farmers, as Farmer’s Weekly reports. The higher prices are driving up the cost of egg, chicken and pork production. These are South Africa’s most affordable forms of meat protein.
Dr Abongile Balarane, General Manager of the South African Poultry Association’s (SAPA) Egg Organisation, said the entire value chain was affected. Variable costs to produce an egg had increased between 70% and 80%, and had forced many producers, particularly small-scale producers, and some packing stations, out of the industry.
Izaak Breitenbach, General Manager of SAPA’s Broiler Organisation, said that the broiler industry was also under severe pressure because of high feed costs and load-shedding, which was having a negative impact on abattoirs. While the tariff hike would increase production costs, he said that the biggest problem was that it would also increase the cost of feed production, which would result in even higher feed prices.
Johann Kotze, CEO of the South African Pork Producers’ Association, confirmed that pork producers would also be negatively impacted by the price hike, but that the situation would be worse for feed processors and players higher up in the value chain, who were heavily dependent on the cold chain.
Kotze noted that consumers, too, were under pressure and the electricity price hike left them with less disposable income. So far, 2023 has been a series of knocks for South Africa’s agricultural sector.
Ramaphosa hits out at EU over citrus “protectionism”
President Cyril Ramaphosa has delivered a strong message to the European Union over what the government regards as “rising protectionism” and “unfair” trade practices blocking South African agricultural imports, most recently citrus.
Ramaphosa spoke at the South Africa-Finland Business Forum in Pretoria. He subsequently sent out a series of tweets highlighting his comments about EU trade actions.
“We are disappointed at the acts of EU protectionism against South African farming products, most recently against our citrus. We are now the world’s second largest exporter of citrus and believe recent decisions by the EU are unfair,” he tweeted.
And, in a message for Finland, he said “We look to you to make the case against rising protectionism in the EU, and in favour of free trade”.
Citrus exports have recently been in the news because of the sudden imposition of a new requirement that South African oranges have to be subjected to long periods of very low temperatures in order to combat false coddling moth.
This blocked and delayed imports of South African oranges into the EU last year, costing growers R200 million before a temporary solution was agreed. The next citrus exporting period begins this month.
Growers are contesting the regulation, contending that it is unnecessary and a multi-million rand expense for citrus producers. They also believe it is a protectionist measure to limit competition for Spain’s huge citrus industry. South Africa’s poultry producers recently submitted a request for import permits to the EU, which took months of preparation. They were then told that there had been a regulation change in the EU in November 2022 and that the application would have to be started all over again.
Border delays are strangling African trade
Speedier customs processes and doing away with visa applications at borders between African countries have been suggested as a way to speed up intra-African trade.
As this bulletin noted last week, infrastructure problems and border delays were highlighted at a meeting in Cape Town of the business forum of the Africa Continental Free Trade Agreement (AfCFTA).
The trade pact, encompassing the entire African continent was launched in 2015. It has the potential to create the world’s largest free trade area with 1.3 billion consumers – but progress has been slow.
The council said inconsistent and inadequate freight and logistics along African borders hindered intra-African trade.
Freight News reports that, in response to this criticism, the AfCFTA has called for the removal of visas and a reduction of customs processes to facilitate the easier movement of goods between African countries.
Council members had cited high customs delay periods and visa delays – visa applications could take three days and more to approve – as hindrances to trade. Perishable goods were lost due to limited cold chains.
“As we say, goods move with people. This idea of taking more than three days waiting for a visa application at the border is killing intra-Africa trade,” said John Kalisa, chief executive officer of the East African Business Council, a member of the ABC representing the East African Community.
“As members of the African Business Council, we want African countries to eliminate visa applications at the border and reduce the amount of time it takes to fill in customs paperwork.” Problems are being noted and hopefully will be addressed.
Needed: trucks to take free food to hungry people
SA Harvest, a leading food rescue and hunger relief organisation in South Africa, has been given 1 000 tonnes of oranges, but needs help getting it to the hungry in Durban and Johannesburg.
The organisation has appealed to the South African logistics and transport industries to help them distribute the oranges, donated by Indigo Fruit Farming.
Ozzy Nel, Chief Operating Officer of SA Harvest, says the donation of the fruit “is just one piece of the food rescue puzzle.”
What follows is a massive logistical undertaking to transport 68 tonnes of fruit every week from the packhouse in Nelspruit to either Durban or Johannesburg.
They already have help from Unitrans and Maersk, who are providing trucks for the first four weeks, and from HelloChoice, which has procured the agri bins.
“This leaves us with a weekly transport requirement of 68 tonnes of citrus between Nelspruit and either Johannesburg or Durban between 5 June and 28 August. We are also in need of trucks to return the agri bins to Nelspruit each week.”
The problem illustrates the critical role of logistics in reducing food waste and hunger. “With over 10.3 million tonnes of edible food wasted annually in South Africa, while 20 million people are on the spectrum of food vulnerability, SA Harvest is working to bridge the gap by rescuing surplus food from farms, manufacturers, and retailers and distributing it to those in need,” the organisation says.
