Global Courant 2023-04-20 12:23:53
RCL Foods, owner of Rainbow Chicken, South Africa’s second largest poultry producer, has announced that R620 million will be invested to bring the Hammarsdale production site back to full capacity.
The factory in Hammarsdale, west of Durban, was a victim of chicken dumping, mainly by the European Union. In 2017, when RCL halved production at the factory and laid off around 1,200 workers, the EU sent huge quantities of dumped chicken portions to South Africa.
Now imports into the EU have been reduced to almost zero due to bird flu outbreaks. Import volumes have declined and most bone-infused cuts, such as leg quarters, come from the United States and Brazil.
After years of losses, Rainbow has a new CEO in Marthinus Stander and is implementing a turnaround plan.
The RCL investment will restore the second shift closed in 2017 and create jobs in the region, the company said in a statement at the fifth South African investment conference earlier this month. The statement was reported by Just eat.
“The R620m includes a combination of RCL Foods’ own investment in its Hammarsdale Rainbow Chicken Processing Plant and Hatchery, and third-party investment by contract growers to increase the supply of chicken to our facility,” said RCL.
“The overall goal is to get the plant back up to full capacity and increase production by 60% in a year’s time. This will increase the local supply of chickens and provide economies of scale, while also creating much-needed additional employment.
“The Rainbow Chicken Processing Plant and Hatchery in Hammarsdale primarily supplies KwaZulu-Natal through all channels. This expansion is expected to create jobs as we restore the second shift at the Hammarsdale processing facility,” said RCL.
In terms of the 2019 poultry master plan, the South African poultry industry has committed to investing R1.5 billion in expanded production. It has already met that goal and has said additional investments will be announced.
The master plan envisaged that increased production would provide greater domestic demand and a significantly greater export drive. This would be supported by a crackdown on dumped and illegal imports. While new production capacity has been achieved, the implementation of the other elements is well behind schedule and the government has delayed the implementation of new anti-dumping duties on imports from Brazil and four EU countries
The poultry industry in Ghana needs to be saved – again
The Ghanaian poultry industry has long been an example of what can go wrong when dumped chicken floods the country, particularly from the European Union due to duty-free trade agreements with the EU.
FairPlay has repeatedly reminded people that in 2016 the Ghanaian industry had collapsed because imports had taken up 95% of the market. The country’s then prime minister told the United Nations that the resulting job losses were one of the reasons Ghanaian migrants flocked to Europe.
Reviving the industry after the devastation of imports has been expensive. Initially, it was a five-year programme United States Department of Agriculturee, and that of the government Broiler revitalization program, backed by an $87 million loan from the country’s Agricultural Development Bank. Now Poultry World reports that the Ghanaian government has made a “massive investment” of another $541 million to improve the industry – dumped imports have continued and local industry says it is on the brink of collapse again
The magazine quoted the chief director of the country’s Ministry of Food and Agriculture, Robert Ankobia, as saying the investment would take the country one step closer to achieving self-sufficiency in poultry meat products.
The Ghana National Poultry Farmers Association said that while the country’s poultry sector was on the verge of collapse, Ghana imported nearly 600,000 tons of frozen chicken worth $600 million each year.
The latest investment from the Ghanaian government aims to expand domestic production from the current 50,000 tons per year to a planned 450,000 tons, and to increase the value of Ghana’s poultry sector from the existing $62 million to $562 million, according to Ankobia. Let’s hope it works this time.
Who controls the import of chickens?
Two small items in the most recent South African import statistics raise much bigger concerns. Chicken products are supplied in the country that may not be accepted.
Both questionable items concern mechanically deboned meat (MDM), a paste used in the production of processed meats such as polony.
In February of this year, the Netherlands landed 40 tons of mechanically deboned meat (MDM) in South Africa, apparently in violation of a poultry import ban that applies to all raw chicken meat.
This follows the import of 229 tonnes of frozen MDM from the European Union in January – 202 tonnes from the Netherlands and 28 tonnes from Denmark.
Due to bird flu bans, these countries are not allowed to export raw products to South Africa.
Also in February, South Africa imported 51 tonnes of frozen MDM from the United States. These imports from the US happen on a regular basis, apparently in violation of import regulations that state that only “anatomically identifiable parts” may be imported from the US, and then only from safe geographical compartments. MDM is not an anatomically recognizable cut, it is a paste. The volumes are small, but the principle is important. Why are these shipments not checked at the port of entry and stopped if they are illegal?
El Niño may not be so bad, says Wandile Sihlobo
Amid dire warnings of a possible agricultural disaster in southern Africa, with hot and dry conditions starting later this year, a respected agricultural economist says things may not be so bad.
The weather change is caused by the return of the El Niño phenomenon, which ends three seasons of above-average rainfall and heralds the possibility of record temperatures and drought.
The Agricultural Business Chamber said last month that the weather influences El Niño could pose a threat to South Africa’s food security.
However, the chamber’s chief economist, Wandile Sihlobo, now has better news, at least in the short term.
In a long tweetSihlobo said the weather phenomenon, monitored by the International Research Institute for Climate and Society at Columbia University, would lead to less than normal rainfall and higher temperatures in South Africa.
“If intense, this could resemble the dismal agricultural conditions we saw during the last El Niño drought in the 2015/16 season,” he said. This resulted in severe losses in maize and other field crops, fruits, vegetables and livestock.
“But I doubt it will be that bad. So far, all indications point to a weak El Niño and soil moisture throughout South Africa remains quite favourable.
“Therefore, I remain optimistic that the 2023/24 agricultural season in South Africa should be OK, although crop yields could fall significantly from levels of recent years,” Sihlobo said.
“If my opinion is correct, we should not have a notable increase in food price inflation in 2024; we should see at least a softer pace than the expected levels for 2023,” he concluded.
One commenter already tweeted that it is too early to conclude that a strong El Niño is unlikely – the El Niño indicators will not be running at full capacity until September. It is a development that will be watched very closely, as El Niño could have a huge effect not only on agriculture, but on the entire South African economy.
Avian flu vaccines are becoming increasingly popular
Bird flu vaccines are slowly becoming a reality as the global poultry industry tries to find an alternative to the mass culls that have been used to prevent the spread of the disease.
The sheer number of culls in the latest outbreak (58 million in the United States and 50 million in the European Union) has accelerated the push to make vaccines effective and acceptable. There has been resistance to vaccinesmainly due to fears that vaccination could mask infections and lead to trade bans.
Governments are likely to support an effective vaccine as, with notable exceptions such as South Africa, they have paid increasing amounts in compensation as poultry culls have escalated into the world’s worst avian flu outbreak.
Now France has taken the plunge. Poultry world reports that France, one of the countries hardest hit by bird flu outbreaks, is planning a vaccination program later this year if final test results come back positive. It has launched a tender for 80 million doses of bird flu vaccines and is the first EU country to take this step.
“France has mandated 2 companies, France’s Ceva Animal Health and Germany’s Boehringher Ingelheim, to develop the bird flu vaccines,” reports Poultry World.
“Both vaccines were found to be effective in protecting birds from the virus itself and – more importantly – also preventing birds from spreading the virus.”
Vaccine trials continue in other EU countries, as well as in the United States started testing bird flu vaccines.
The US trials are the first step in a lengthy process towards the possible first use of vaccines to protect US poultry against the deadly virus. According to the U.S. Department of Agriculture, it can take up to two years for a vaccine to become commercially available. The South African poultry industry is closely monitoring international developments, but has not yet decided to approach the government about a policy change.
Delays in the US are costing citrus growers dearly
Here is yet another example of bureaucratic delays hindering agricultural exports.
The issue has been brought to the attention of trade adviser Donald MacKay, who estimated that South Africa lose billions of rand due to delayed rate decisions.
The citrus sector is a powerful example. According to a report in Freight newsthe South African citrus sector expects exports to grow by 10 million boxes per year over the next ten years.
That’s good news for an industry currently struggling, with many producers losing money due to rising input costs and the impact of daily power outages.
Justin Chadwick, CEO of the Citrus Growers Association, said red tape is preventing some key markets from importing larger volumes of South African citrus.
For example, the United States could import an additional 75,000 tonnes of grapefruit and soft citrus by 2024, creating a further 3,750 jobs in the sector and generating more than R1 billion in export earnings.
“Currently, however, only growers in the Western and Northern Cape are allowed to export citrus to the region. Growers in other provinces will only be allowed access to the US market if a long-delayed final settlement is reached between our two governments – a process that has been going on for six years. drags on.” That’s six seasons of lost exports, lost income and lost jobs.
