Skyrocketing offal prices in South Africa due to chicken scarcity: The root causes revealed
South Africa Faces Potential Economic Impact and Food Security Concerns Due to Avian Influenza Outbreak in Brazil
The Association of Meat Importers and Exporters (AMIE) has issued a warning regarding the ongoing Avian Influenza (HPAI) outbreak in Brazil's Rio Grande do Sul, predicting that the situation could severely impact South Africa's economy and food security.
Local producers are unable to fill the supply gap for poultry offal, such as feet, gizzards, and skins, as well as mechanically deboned meat (MDM), leading to price increases and making basic protein less affordable and accessible for millions of South Africans.
Brazil is the world's largest exporter of poultry products, providing 73% of poultry (excluding MDM) imported by South Africa, including frozen bone-in chicken and offal. It also accounts for 92% of all MDM imported, with an average of 18,000 metric tons per month over the past year, essential for the production of processed meat products.
Imameleng Mothebe, CEO of AMIE, expressed concerns, stating, "Chicken offal and MDM are not luxuries; they are fundamental to school feeding programs and the production of processed meats, which are the most affordable proteins for low-income households." Despite local producers aiming to increase their production by four million birds per month during the closure of Brazilian poultry exports, Mothebe emphasized that local producers cannot compensate for the production shortfalls in offal and do not have the capacity to produce MDM at commercial scale.
According to official South African import statistics, significant shortfalls in offal per month remain even with increased local production:- Chicken feet - 3,773 MT tonnes per month- Gizzards - 1,315 MT tonnes per month- Livers - 287 MT tonnes per month
Without a regionalization agreement with Brazil, which would allow for the import of products from areas not affected by the outbreak, price increases and food shortages for consumers, as well as job losses for local manufacturers of processed meats employing over 125,000 workers, may follow.
The current shortage of MDM has led to cost surges for processed meat producers, with thinning inventory levels causing shelves prices to reflect the reality. MDM prices have surged from R13 to R31/kg, while offal like gizzards and skins have seen double-digit increases. These price increases will be compounded by rising input costs, particularly due to the recently announced fuel levy hike in the national budget, which adds inflationary pressure across the value chain.
Mothebe urged expediting engagements between South Africa and Brazil to minimize the impact on the South African economy and consumers. "The current situation is not just a trade issue; it's about protecting jobs, businesses, consumer affordability, and food security," Mothebe said.
Additional context from enrichment data reveals that, as of the latest information, a compartmentalization agreement between South Africa and Brazil has not been established, meaning imports from unaffected regions within Brazil are not possible in the event of a disease outbreak. This news underscores the importance of flexible trade agreements to mitigate potential disruptions in the supply chain during health crises.
- The absence of a regionalization agreement between South Africa and Brazil could potentially impact the health-and-wellness sector, as price increases and food shortages for consumers may lead to fewer affordable protein options such as processed meats, which are crucial for millions of South Africans.
- In the realm of science and lifestyle, Imameleng Mothebe, CEO of AMIE, emphasizes that the current situation is not just a trade issue; it's about protecting jobs, businesses, and food security, highlighting the importance of flexible trade agreements to maintain stability in the food-and-drink industry during health crises.
