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South Africa, Republic of, Poultry and Products Annual Overview - August 2005

by 5m Editor
20 August 2005, at 12:00am

By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Annual 2005 report for South Africa. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.

South Africa, Republic of Poultry and Products Annual Overview - August 2005 - By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Annual 2005 report for South Africa. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.

Report Highlights:

South Africa produced 808,000 tons of broiler meat in 2004, marginally more than in 2003. The industry is expected to show stronger growth in 2005 and 2006 mainly due to the buoyant economy bolstering demand. Imports continued to increase in 2004, reaching 69,000 tons of whole birds and cuts. Seventy six percent of the imports were supplied by Brazil. The anti-dumping duty on US leg quarters is due to be lifted in December, opening the market to US products again.

Summary

South Africa’s 2004 broiler production is estimated at 808,000 tons, a little more than the revised figure of 804,000 tons for 2003. A further increase in production is expected for 2005 as a result of the buoyant South African economy increasing disposable income and thus demand. Total broiler meat imports (whole birds and cuts) reached about 69,000 tons in 2004 compared to about 50,000 tons in 2003. MRM (Mechanically Removed Meat) and offal are not classified as poultry meat. Nonetheless imports of these products amounted to about 85,000 tons for total poultry product imports of 154,000 tons. In contrast total imports amounted to about 125,000 tons in 2003 and 80,000 tons in 2002. Imports are, however, expected to increase again in 2005 as a result of the strong SA Rand.

Imports are currently still increasing but the anti-dumping duty on US bone in cuts is only due to be lifted in December 2005 when the US will again be able to compete. Brazil, (76%) and Canada are currently the main suppliers.

Production

Broiler meat production in 2004 is estimated at 808,000 tons. This amounts to 612 million birds, or 11.8 million per week. Unit weight is taken at 1.32 kg. (excluding giblets). This is still 0.5% more than the estimated 804,000 tons, or 11.7 million per week produced in 2003.

Annual slaughter for 2004 is estimated at 612 million birds at 1.91 kg. live weight and 1.32 kg. carcass weight. That means,
Total live weight production was 1,169,000 tons,
Young chicken meat production amounted to 808,000 tons,
Offal production amounted to 117,000 tons,
And feathers, entrails and blood amounted to 245,000 tons.

Offal production included:
Gizzards 29,400 tons,
Livers and hearts 17,750 tons,
Necks 34,900 tons,
Feet 34,900 tons,
Total offal 116,950 tons.
While offal is obviously consumed in some way or another, we are more interested in young chicken meat production and consumption.

Forty five percent of the 2004 imports were chicken meat and 55% chicken products. Whole birds and discernable cuts are the result of a conscious effort to produce young chicken meat, and the other products are mainly by-products. The total meat shown in the table above, 69,416 tons for 2004, should thus be taken as chicken meat imports.

The poultry and egg industry annually produces in excess of 800,000 tons of poultry meat and well on 300,000 tons of eggs. In a normal year the industry consumes nearly 70% of the feed industry’s production and 15 to 25% of the total corn crop. Production is efficient, a 1.2 kg. carcass weight can be reached in 38 days at a feed conversion rate of 1.8, but production costs are high. Production at high altitudes leads to higher, 5 to 6%, fatalities.

The latest SA Poultry Association cost analysis suggests that the production cost of broiler meat decreased by 6.4% from R10.88/kg. in 2003 to R10.20/kg. in 2004 mainly due to lower corn prices.

Consumption

Consumption When the poultry meat imports are added to production, and the small exports subtracted, domestic consumption amounted to about 875,000 tons in 2004 and is likely to exceed 900,000 tons in 2005.

To put the industry in perspective we can compare per capita consumption of the different meats as supplied by the Department of Agriculture.

Per capita poultry consumption first passed red meat consumption in 1998/99 and has since increased the gap every year. Lamb and pork per capita consumption is small, pork consumption is limited by religious custom while mutton production has decreased as a result of excessive stock theft.

Tariffs and trade

The total 2004 imports were nearly 19% higher than the 2003 figure, but The Jan.-May 2005 imports are 40% higher than in the corresponding period in 2004, which illustrates the increasing trend.

The first category of imports is whole birds, which constituted 31% of chicken meat imports in 2004. Average Customs reported landed price in 2004 was R4.50/kg. compared to R4.83 in 2003 and R5.71 in 2002, the decrease mainly due to the strong exchange rate. The US$ price was 58c/kg. in 2002, 67 c/kg. in 2003 and 71 c/kg. in 2004.

Fresh and chilled whole birds are allowed in free of duty while the general tariff on frozen whole birds is 27% ad valorem, 23.76% on product from the EU and free from the SADC neighbors.

Boneless cuts (mainly chicken breasts) are a high quality product also used in the food service industry. It formed about 20% of chicken meat imports in 2004 with a much higher landed price, R9.52/kg. in 2004 compared to R8.18 in 2003 and R12.47 in 2002. The corresponding US$ prices were 1.49/kg. in 2004, 1.11 in 2003 and 1.20 in 2002. The general rate of duty is 5%, 4.4% from the EU and free from the SADC countries.

The following category, bone in cuts, include the chicken leg quarters which was the cause of the anti dumping duty against the US product instituted in 2000. It formed 49% of the 2004 meat imports, the US being replaced as a supplier by Brazil and Canada. The quoted 2004 landed price was R5.04/kg. compared to R4.45 in 2003 and R4.88 in 2002. The US$ price was 80 c/kg. in 2004, 61c/kg. in 2003 and 50c/kg. in 2002. The 2004 quantity involved is 34,000 tons of which Brazil supplied 26,000 tons. The US supplied 47,200 tons in 1997/98, 28,600 tons in 1998/99 and 30,900 in 1999/00 but only 25 tons in 2004/05.

The previous Board on Tariffs and Trade brought out an initial report #4065 in June 2000 that recommended the anti-dumping duty. The final report # 4088 was published in December 2000. Provisional payments were introduced on July 5, 2000 and finalized on December 27, 2000, with retrospective effect to 5 July 2000.
On May 28, 2004 the International Trade Administration (ITAC) notified all parties that the anti-dumping duty would expire in 2005 if there were no requests to continue with the duty. The date of the imposition of the duty was given as 12/27/2000 and the date of expiry as 12/27/2005. Interested parties were given time till 06/27/05 (before 07/05/05) to request a continuation of the duty. The SA Poultry Association has submitted a continuation request and ITAC is currently looking at it. It is claimed that the South African law considers the final date of the imposition of the duty (12/27/2000) as the date when the duty commenced, and not the retrospective date.

The general rate of duty on this category is 220 c/kg. from the EU the rate is 193.6 c/kg. and the SADC free. The anti-dumping duty on product from Tyson Foods is 224c/kg. from Gold Kist Inc. 245c/kg. and 725 c/kg. from other US producers.

The next category is Mechanically Recovered Meat (MRM) used in the processing and canning industry. This is not a direct consumption product but a cheap meat substitute. The average import price was R2.08/kg. in 2004 compared to R2.44 in 2003 and R2.06 in 2002. The US$ price was 32c/kg. in 2004 and 2003 and 23c in 2002, lower than the average offal price. The quantity involved is substantial with sales in the first five months of 2005 up 63% on the corresponding months in 2004. This product is allowed in free of duty.

Chicken offal is also a big category, consisting of feet or claws, skins, liver, neck, hearts and stomach (heads not allowed). Apparently the bulk of the trade is feet or claws. The average import price was R2.61/kg. in 2004 compared to R2.41/kg. in 2003 and R2.47/kg. in 2002. The US$ prices were 40c, 32c and 24c respectively. The general rate of duty on offal is 27% but product from the EU and SADC is free.

Turkey Production

Domestic turkey production is still very small although a producer has surfaced promising year round supplies. The market is, however, mainly based on the duty free imports. Whole bird imports dropped by a third in 2004, as turkey is just not a big item in the local shopping basket.

Further Information

To read the full report please click here

Source: USDA Foreign Agricultural Service - August 2005