ROY THOMAS | Import tariff rebate on chicken a relief for consumers

Local shoppers have reason to celebrate, as the International Trade Administration Commission (ITAC) confirmed last week that it is lifting punitive tariffs on imported chicken.

This decision was made in response to the impacts of the highly pathogenic avian influenza (HPAI), also known as bird flu, which has ravaged both global and local poultry supplies.

Heeding calls and warnings from importers and businesses of the serious consequences of the outbreak on the cost of chicken, ITAC ’s tariff rebate represents a welcome reprieve for consumers –especially low-income households.

Despite claims that bird flu had little impact on supplies or prices on shelves last year, Statistics SA’s latest inflation figures reveal that in 2023, the price of eggs surged by 38%, chicken giblets by 18.3%, fresh chicken portions by 14.6%, whole chicken by 8.4%, and individual quick frozen portions by 6.4% – all above average inflation.

These price increases clearly reflect the impacts of bird flu both locally and abroad, in addition to the effect of new import tariffs implemented in August last year. The reality is that while local chicken producers remain hopeful of receiving government approval for a vaccine by the end of next month, SA does not produce enough chicken to supply local demand.

Imports therefore serve as an important complement and price regulator in the local market. SA’s food supply chain is staggering beneath the weight of several serious break downs with severe consequences for shoppers at the till.

Left unattended, these issues could spell trouble, if not disaster for cash-strapped consumers and the economy in general, painting a gloomy picture for the year ahead.

The first is the ongoing headache of load shedding, which has dire impacts on business operations and particularly cold stores. According to the Outlier, there were 335 days with load shedding in 2023, and some experts predict that 2024 could be even worse.

To offset the effects of ongoing power cuts, Hume International installed solar panels and generators on all our buildings and cold store facilities. As a major importer and food distributor, this has removed the risk to our frozen products and, in turn, our clients and end-consumers.

Likewise, we now include solar panels in all our development planning. Then there are the severe water shortages that struck the Eastern Cape, driven by a combination of drought and poor infrastructure forcing businesses to sink boreholes to survive.

While these seem like simple solutions on the surface, they introduce an additional cost factor that many companies have never previously had to consider – and one that translates into higher prices in food baskets.

But load shedding is just the start of the troubles. Many food importers are grappling with ongoing delays and backlogs at ports, and expect this to continue. This has a direct impact on the ability to deliver products timeously and cost-effectively.

And, the ongoing conflict in the Red Sea is playing havoc on global shipping and pricing. With all these pressures being brought to bear upon food prices, the import tariff rebate on chicken offers real cause for optimism.

■ Thomas is logistics and operations director of Hume International