Declining Prices of Dark Meat Intensify Competition for African Poultry Producers

While on global market price of whole chickens and breast meat remain strong, ‘dark’ meat prices are falling. This is a source of concern to sub-Saharan African poultry producers. Leading EU poultry producers are increasingly targeting African market. In this context an over vigorous implementation of EPA commitments on the elimination of non-tariff barriers to import from the EU could see African markets increasingly opened up to rapidly expanding EU poultry meat exports.  This could carry serious consequences for African poultry meat producers, in a context where considerable rural income earning opportunities can be generated along poultry feed supply chains.

According to Rabobank ‘the outlook for the global poultry industry for 2018 is promising’, with ‘ongoing demand growth…lower feed prices in 1H 2018, if not longer’. Rabobank maintains ‘global prices of chicken have remained strong, especially for whole chicken and breast meat’. However it also notes ‘dark meat prices have fallen’. New suppliers are constantly entering the global export trade intensifying competition for markets. Despite the favourable outlook for 2018 Rabobank is advising the poultry industry to ‘further reduce supply in order to rebalance supply and demand’ (1).

According to Rabobank ‘the EU poultry industry is performing well, based on a favourable supply and demand balance’ in the EU. However production patterns are changing across the EU with environmental regulations in North-Western Europe constraining further growth, in a context where production in Eastern Europe continues to grow rapidly (1).

Poland has in recent years emerged as the EU’s top poultry meat producer, ‘in the first 8 months of 2017 Polish poultry meat production totalled 1.762 million tonnes an increase of 9.9%’ compared with the same period in 2016 (1). By the end of 2017 USDA estimated Polish poultry meat production was 8% higher than in 2016, with poultry production forecast to grow a further 2% in 2018.

Extra-EU Polish Poultry Meat Exports (tonnes)

2010 2011 2012 2013 2014 2015 2016 % change 2010-16
88,829 84,488 91,143 110,314 144,937 179,645 246,142 +177%

Source: EC Market Access Data Base

Subsequently the growth in Polish poultry meat production is forecast to slow down in the face of ‘lower domestic prices for poultry meat and declining export demand’. The USDA describes the Polish poultry meat sector as ‘highly integrated and export orientated’. Export markets both EU and beyond account for around 30% of Polish poultry meat production (2). While Polish poultry meat exports primarily go to EU markets, the extra-EU poultry meat trade is growing strongly (1).

Top Sub-Saharan African destinations for Polish Poultry Meat Exports in 2016 (tonnes)

2010 2016 % change
Congo 3,430 15,582 +354%
Benin 10,601 15,601 +47.2%
Liberia 357 10,437 2,824.0%
Ghana 1,657 9,349 464.2%
Gabon 824 6,691 712.0%
South Africa 24 4,944 20;500.0%
DRC 642 4,822 651.1%
Guinea 72 3,543 4,820.8%
Togo 642 3,291 412.6%
Sub-Total 18,249 70,260 +285%
Other SSA 741 6,770 813.6%

Source: EC Market Access Data Base

Between 2010 and 2016 direct Polish poultry exports to extra EU markets increased 177% (3).

Over the same time period Polish poultry meat exports to Sub-Saharan Africa increased 309.3%, with Sub-Saharan Africa countries coming to take 31.6% of Polish extra-EU poultry meat exports in 2016 up from 21.4% in 2010. The largest increases in tonnage terms were to West African countries (+29,905 tonnes) while in % terms the largest increase was in exports to South Africa (+20,500% from 24 tonnes to 4,944 tonnes) (3).

However while between 2010 and 2016 Polish poultry meat exports to the top 9 destination countries in Sub-Saharan Africa grew 285% exports to other sub-Saharan African countries grew 813.6% (3) (for more details see annex 1).

This is part of a more generalised trend in EU exports of poultry meat to Sub-Saharan Africa, which has seen the significance of Sub-Saharan African markets expand, with this trend only being set back by the introduction of SPS based import restrictions by the South African government following outbreaks of Avian Influenza amongst EU member states poultry flocks and stricter Nigerian border controls to address smuggling operations from Benin

Recent Trends in EU Exports to the Main Sub-Saharan African Destinations (tonnes

2013 2014 2015 2016 Jan-Nov 2017 Change comp Jan-Nov 2016
Ghana 72,252 56,900 68,283 77,123 126,345 +78%
Benin 139,247 163,844 138,414 116,859 100,761 -7%
South Africa 158,548 203,412 213,577 270,577 71,149 -72%
DRC 28,625 33,697 35,269 44,492 59,515 +53%
Gabon 25,070 29,409 37,330 31,925 46,072 +66%
Sub-Total 423,742 487,262 492,873 540,976 403,842
Total EU 1,428,470 1,503,984 1,489,872 1,616,661 1,531,543 -5.3%

Source: EC, ‘EU Market Situation for Poultry Committee for the Common Organisation of the Agricultural Markets’, 18 January 2018

Comment and Analysis

In the context of the structure of sub-Saharan African poultry meat demand the fall in ‘dark meat’ prices and the entry of more and more players into the poultry meat export trade is a matter of growing concern. Imports of cheap poultry parts pose major challenges to the commercial prospects of sub-Saharan Africa poultry producers, be they large or small scale producers.

The national poultry sector trade policies set in place in ACP countries have a major bearing on patterns of EU poultry meat exports. EU poultry meat exporters have proved highly responsive to trade policy measures set in place by sub-Saharan African governments. Thus we find Nigeria’s ban on poultry meat imports saw neighbouring Benin emerge as major EU export destination, with the vast majority of these poultry meat exports to Benin then being smuggled into Nigeria.  However the tightening up of border controls by the Nigerian authorities to discourage smuggling across the Benin border has in recent years seen EU poultry meat exports to Benin dip. Between 2014 and 2016 EU poultry meat exports to Benin fell 28.7% with a  further decline of 7% in the first 11 months of 2017 (4).

In contrast the abandonment of efforts to regulate poultry meat imports in Ghana saw imports from the EU increase 35.5% between 2014 and 2016 (having previously fallen 24.4% in 2014 compared to 2013), followed by a massive 78% increase in the first 11 months of 2017.

Just how responsive EU exporters are to the use of trade policy measures is demonstrated by their response to South Africa’s SPS based import restrictions introduced at the end of 2016.  In 2016 South Africa accounted for half of all the poultry meat exported to the top 5 sub-Saharan African destinations. In 2017 as exports to South Africa fell a massive 72% (-199,428 tonnes), EU exporters were able to expand exports to Ghana, Gabon and the DRC by 78%, 66% and 53% (a total of 78, 392 tonnes) in the first 11 months of 2017.  This in part replaced the lost South African export market.

It is against this background that the implementation of EU reciprocal market access commitments under the concluded economic partnership agreements (EPAs) will need to be assessed. While under most EU-sub-Saharan African EPAs, tariff liberalisation for poultry meat is not included in the commitments made; all agreements include commitments to abolishing the use of quantitative restrictions on imports from the EU from the date of entry into force of the agreements. This needs to be seen in a context where across a number of ACP countries quantitative restrictions on imports of poultry meat are maintained in place as part of efforts to promote local poultry sector development.

The entry into force of these EPA commitments is potentially a source of concern. Speaking at the AVEC poultry industry conference in 2016 Agriculture Commissioner Hogan committed himself to working with the European poultry industry and member states governments in securing the removal of controls on EU poultry meat exports in major African markets.

Against this background the issue of how EPAs are to be interpreted and applied in practice needs to be an issue taken up in the context of the ACP-EU negotiations on a new Post-Cotonou development partnership agreement.  It would appear important that ACP governments secure a commitment from the EU to the flexible and responsible implementation of EPA commitments, in ways which give primacy to national agro-food sector development in ACP countries.  Without such a commitment African governments could see themselves coming under intense pressure to abandon quantitative restrictions on imports in the context of a projected 17.6% expansion in the volume of EU poultry meat exports between 2017 and 2030.

(1), ‘Cautious optimism in global poultry market’, 18 December 2017
(2) USDA, ‘Poland, 2017 annual Poultry and poultry products review’, 7 December 2017
(3) EC, Market Access Data Base,
(4) EC, ‘EU Market  Situation for Poultry Committee for the  Common  Organisation of the Agricultural Markets’, 18 January 2018


Annex 1: Polish Poultry Meat Exports (Tonnes) 2010 and 2016 by Region and Sub-Saharan African Country

2010 2016 % change   2010 2016 % change
West Africa 13,549 43,454 +220.7% Central Africa 5,367 28,052 +422.7%
Benin 10,601 15,601 +47.2% Congo 3,430 15,582 +354.3%
Liberia 357 10,437 +2,823.5% Gabon 824 6,691 +712.0%
Ghana 1,657 9,349 +464.2% DRC 642 4,822 +651.1%
Guinea 72 3,543 +4,820.8% Equat Guinea 401 339 -15.5%
Togo 642 3,291 +412.6% CAR 312 n.a.
Sierra Leone 25 544 +2,176% Angola 70 176 +151.4%
Ivory Coast 147 428 +191.2% Cameroon 130 n.a.
Gambia 88 n.a.
Niger 25 77 +208.0% East Africa 0 190 n.a.
Guinea Bissau 54 n.a. Comoros 130 n.a.
Cape Verde 28 n.a. Mauritius 25 n.a.
Sao Tomé 23 14 -39.1% Tanzania 25 n.a.
Kenya 10 n.a.
Southern Africa 74 5,334 +7,108%
South Africa 24 4,944 +20,500%
Mozambique 25 313 +1,152%
Namibia 25 77 +208%