Rising poultry prices threaten food security for South Africa's vulnerable households

In the third quarter of this year, the average retail price of fresh chicken portions and chicken giblets per kilogram rose by 1.13% and 0.87%, respectively, compared to the preceding quarter. Picture: Leon Lestrade, Independent Newspapers.

In the third quarter of this year, the average retail price of fresh chicken portions and chicken giblets per kilogram rose by 1.13% and 0.87%, respectively, compared to the preceding quarter. Picture: Leon Lestrade, Independent Newspapers.

Published Oct 28, 2024

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The South African poultry industry stands at a critical juncture as the average retail poultry prices experience a noticeable increase, largely due to the highly pathogenic avian influenza (HPAI) outbreaks.

This surge is having dire implications, particularly for poor and marginalised households, as highlighted by a recent review from the National Agricultural Marketing Council (NAMC) authored by Matume Maila and Lwazi Dladla, and published last week.

The review offers a detailed examination of how HPAI outbreaks have influenced poultry pricing and, consequently, the food security of households across the nation.

In the third quarter of this year, the average retail price of fresh chicken portions and chicken giblets per kilogram rose by 1.13% and 0.87%, respectively, compared to the preceding quarter. In contrast, certain frozen chicken products saw declines, with prices for frozen non-IQF portions dropping by 3.37%.

However, the year-on-year comparison indicates an alarming upward trend in prices, with whole chicken-fresh per kilogram increasing by 5.36% and chicken portions-fresh by 3.91%

As the NAMC pointed out, the rising costs meant that households living below the food poverty line may find it increasingly difficult to incorporate essential poultry protein into their diets.

The report underscores that these vulnerable populations are already grappling with the compounded effects of economic downturns and climatic shocks affecting the agricultural sector.

Adding to this troubling scenario, the Food Basket Price Monthly Report from October 2024 revealed that the cost of a 28-item urban food basket rose to R1 288.81 in September from R1 280.11 in August—an increase of 0.7% month-on-month and a staggering 7.6% year-on-year. Such hikes demonstrate the critical need for immediate interventions to ensure food access for the poor.

Both Maila and Dladla elaborated on the challenges facing South Africa’s poultry industry, including the economic fallout from HPAI outbreaks that have previously necessitated the culling of countless birds, resulting in significant financial losses. The influx of cheaper imported chicken has further complicated the situation, raising concerns over the sector's long-term viability.

“The domestic impact of HPAI outbreaks has been substantial, with several households unable to meet their nutritional requirements as they cannot afford to purchase chicken and its by-products,” they said.

Market data reveals that while the producer price of frozen chicken has seen a modest increase of 0.76%, fresh and IQF chicken prices have plummeted, falling by 2.32% and 0.21%, respectively. The authors attributed this downward shift to decreased consumer demand due to fears surrounding HPAI, compounded by the overwhelming supply of low-cost imports.

As the potential for future HPAI outbreaks looms, the report warned that the burden of any price fluctuations would disproportionately affect poorer households, leaving them to struggle to meet their nutritional needs.

In light of these findings, Izaak Breitenbach, head of the South African Poultry Association’s broiler organisation, recently highlighted the need for VAT exemption on chicken products to bolster access to this essential protein source. An application to zero-rate chicken products for VAT is set to be submitted soon, signalling a potential lifeline for South Africa’s most vulnerable residents.

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