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Saturday, December 9, 2023

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Poultry players divided: Will SA face a critical egg shortage over the festive season?

Eggs from chicken farm in the package that preserved for sale.

Eggs from chicken farm in the package that preserved for sale.

Published Nov 9, 2023


“Will there be a critical egg shortage this festive season?”. This is the latest dispute between local egg producers and importers, who say the proof will be in the pudding in December.

On the one side, import and export business Hume International on Thursday accused local egg producers of downplaying the critical egg shortage in South Africa.

The company's managing director, Fred Hume, said on Thursday that it had been reported that roughly 7.5 million commercial layer hens had been culled during the recent bird flu epidemic that hit the nation.

“Assuming one hen lays around five or six eggs per week, the local market is then currently underproducing by as many as 45 million eggs per week. Yet, the public is continually told that there’s nothing to fear,” Hume said.

He said that in response, the South African Poultry Association (Sapa) was calling on the government to open imports from Zimbabwe, Namibia, Angola and Malawi.

“The issue is that these four nations, at Hume International’s best calculation, produce only around 1kT (kilo tons) per week. By contrast, South Africa needs, at minimum, an influx of 2.25kT to make up for the shortage created by the aforementioned mass culling. We also do not have a clear picture of what the avian influenza situation is like in these countries, and it is highly doubtful that they would sell all their available eggs to South Africa,” he said.

Hume said South Africa could not rely on the Southern African Development Community (SADC) partners alone to help out of this developing crisis.

“We urgently need to ease import restrictions placed on major egg producers such as Argentina, Brazil, the USA, and Eswatini," he said.

Hume said Department of Agriculture, Land Reform, and Rural Development (Dalrrd) Minister Thoko Didiza also announced at the end of October that the department had granted “thousands of permits for the importation of table eggs, fertilised eggs, and poultry meat to ensure sufficient stocks [are] available for the Christmas holiday season”.

Didiza further specified that, in the past two months, the department granted 115 permits for fertilised eggs, 48 for egg powder, and 24 for table eggs, which amounted to 1.9 million eggs - but this was only a fifteenth of the eggs needed per week, and a mere drop in the bucket.

Hume International said the question becomes: how does Dalrrd plan to fill the outstanding 28 million eggs shortage without opening trade with South Africa’s far larger South American trading partners?

The company said Sapa’s claim that during the previous avian influenza outbreak in 2017, “poor, rotten eggs” were dumped in the country by South American exporters painted a deceptive picture of the current situation.

Hume said like its South African poultry import contemporaries, it followed strict regulations on the grading, packing, and marking of imported eggs as set out in Dalrrd’s Regulation 345.

“Simply put, if we import poor quality eggs, we risk losing millions of rands, which is why we strive to ensure that only high-grade eggs enter the country, and no dumping occurs. This, in essence, allows the market to self-regulate.”

Hume called for the South African government to intervene and lift the 40-day rule under Regulation 345 and ease import restrictions and anti-dumping duties on certain countries.

“These measures will ensure that the egg shortage and looming poultry meat shortage is resolved as soon as possible,” Hume said.

However, on the other side, FairPlay said in a bulletin, released on Thursday, that Sapa has said South African consumers could relax – the industry had acted quickly to address supply problems amid avian flu.

The organisation said local producers would be able to supply all or most of the year-end demand and “the industry expects that any shortages this festive season will be minimal”.

FairPlay said, “There will soon be an announcement on whether or not to rebate (ie discount or cancel) import tariffs and anti-dumping duties on imported chicken.“

“The motivation for those rebates would be to avoid a chicken supply shortage at year-end and into 2024. Importers want the rebates, which would lead to more chicken imports, and it’s important to them that the government believes there’s going to be a shortage.”

FairPlay said rebates were not only unnecessary, because the crisis had passed, but they would threaten the existence of many of South Africa’s chicken farmers.

FairPlay this was a far more serious message for the government to listen to.

According to the Observatory of Economic Complexity in 2021, South Africa imported $1.63 million (R31m) in eggs, becoming the 118th largest importer of eggs in the world. At the same year, eggs were the 965th most imported product in South Africa.