TRALAC - Trade Law Centre

Swaziland: 'US chicken dumping to threaten local producers'

Friday, 15 January 2016 Published: | Manqoba Makhubu

Source: Swazi Observer

The Swaziland poultry industry will soon face a challenge to compete with United States (US) unfairly low chicken prices after South Africa allowed American poultry in their market.

Minister of Agriculture Moses Vilakati said this would be a huge challenge to Swazi producers, adding that it was beyond any doubt that US chickens would soon hit the shelves of local retailers, especially through the Republic chain supermarkets like Pick n Pay and Shoprite. 

After being caught in a wishy-washy net for over 15 years to resolve the trade impasse with America over imports of chickens, the Republic finally gave up the struggle to protect its meat market to restore its African Growth Opportunity Act (AGOA) eligibility status. 

United States President Barack Obama officially suspended South Africa's trade benefits from March 15, and effectively set a new deadline for American poultry to be allowed into South Africa. 

The AGOA agreement was finalised by the Republic’s department of trade and industry last week and the South African poultry association disclosed that orders for imports had already been made.

The first orders are expected to arrive in South Africa next month. 

 “This would be a huge setback to the industry that we have worked hard to resuscitate, as overtime this dumping would push domestic producers out of the market,” he said. 

Swaziland commercial sector poultry sales volumes are over 12 tonnes and have a financial value of over E200 million. 

The country also exports 10  percent of eight million chicks to neighbouring countries. 

Vilakati said the US chicken would create a price squeeze to the local producers who are faced with high production costs. 

“We will be faced with a price squeeze, both internally and on our exports to countries like Mozambique,” he said. 

Vilakati said it was time for the country to be pro-active and draft legislations that would protect infantry industries. 

With increasing eateries like Nando’s, Galirtos and KFC, the demand for chicken has been increasing, and the weak currency has sent prices soaring. 

Prices may well climb higher still due to the drought that is devastating  agriculture and pushing up the price of grain that farmers feed to chickens. 

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