Summary
EU exporters have been remarkably successful in finding alternative African destinations for exports of poultry parts impacted by South African AI related import restrictions. In the context of the potential for ‘hard’ Brexit related disruptions of the EU27/UK mutual trade in poultry meat the mobility of EU28 poultry meat exporters would appear to raise concerns. This mutual EU27/UK trade currently amounts to around 830,000 tonnes per annum, with analysts suggesting fully 90% of this trade could be halted under a ‘hard’ Brexit scenario. This could lead to a sudden surge in both UK and EU27 poultry meat exports targeting African ACP markets as early as 2021. Concerns also arise over the possible inclusion of Ukrainian derived poultry meat in exports of ‘EU’ poultry meat to African destinations, in violation of the rules or origin requirements of EU trade agreements.
At the end of 2016 the South African government introduced restrictions on imports of poultry meat from South Africa in the face of outbreaks of Avian Influenza in EU member states. This saw a dramatic 71% decline in EU poultry meat exports to South Africa, from a record 259,810 tonnes in 2016 to 74,514 tonnes in 2017. In 2016 South Africa was the leading destination for EU poultry meat exports not only in sub-Saharan Africa but also globally. South Africa accounted for fully 38.5% of EU poultry meat exports to sub-Saharan Africa and 18% of total extra-EU poultry meat exports (1).
In addition in both 2015 and 2016 the EU was the leading source of imports of poultry meat into South Africa accounting for 47.1% and 48.1% respectively. The introduction by the South African authorities of Avian Influenza related restrictions on imports of poultry meat from a range of EU member states at the end of 2016, saw the EU’s share of imports of poultry meat into South Africa fall in 2017 to 14%, with Brazil re-taking the lions’ share of the market (60.6%) and the US taking second place (15.6%). This occurred in the context of a 0.6% decline in total South African poultry meat imports in 2017 (2).
However EU poultry exporters proved highly adept at finding new markets in sub-Saharan Africa. This gave rise to a situation where despite the massive 71% decline in exports to its main sub-Saharan African destination market, total EU poultry meat exports to sub-Saharan Africa fell only 6.7% (for details see the annexed table) (1).
In absolute terms poultry meat export growth was most pronounced in West Africa (+89,598 tonnes or +32.8%). The highest volume growth in EU poultry meat exports was to Ghana (+ 57,021 tonnes or +75%). This needs to be seen in a context where the recorded landed price of EU poultry meat exports to Ghana was half the average value of extra-EU poultry meat exports in 2016 and 60% in 2017. Despite the increase in the landed unit value of EU poultry meat exports in 2017, between 2013 and 2017 the average landed price of EU poultry meat exports to Ghana fell 9.6% (1)
Average extra EU Poultry meat export prices (€/kg) and average prices for exports to Ghana (2016-17)
| 2016 | 2017 | |
| Ave. EU Export price €/kg Total | 1.208 | 1.178 |
| Ave. EU Export price €/kg – Ghana | 0.610 | 0.709 |
Source: EC Market Access Data Base
There was a similar high % increases in export volumes to Liberia, Niger and Guinea Bissau, which together took an extra 26,445 tonnes. There were also exceptionally high % increases in exports to: Mauritania, where they more than quadrupled; Sierra Leone where they more than tripled; and Ivory Coast where they more than doubled. However this was on the basis of small initial export volumes and added only an extra 14,624 tonnes to extra-EU poultry meat exports (1).
However, the overall volumes of EU poultry meat exports to West Africa were dragged down by an 8.4% decline in exports to Benin. Benin is the second most important market for EU poultry meat exporters in sub-Saharan Africa. This decline was linked to a clamp down on smuggling of poultry parts over the border into Nigeria. There was also a 14% decline in exports to Togo, a 47% decline in exports to Niger and a decline in three other small volume export markets in West Africa (1).
In proportional terms growth was most pronounced in Central Africa (+34.4% but only a 44,115 tonnes increase). In Central Africa the highest volume growth in EU poultry meat exports was to the DRC (+17,575 tonnes or +40.4%), closely followed by Gabon (+16,697 or +53.3%). There was also a 40% increase in exports to Equatorial Guinea (+4,455 tonnes) and a 273% increase in exports to the Central African Republic (+1,796 tonnes). There was even a 153% increase in exports to Cameroon (+273 tonne) (1), where the government has long maintained quantitative restrictions on poultry meat imports as part of efforts to promote local poultry sector development.
EU poultry meat exports to Eastern Africa increased 18.3%, with Madagascar, Burundi and Eritrea emerging as new export destinations for small volume. Exports to the Comoros, the main EU export destination in eastern Africa (which takes some 83.4% of exports to this region), increased some 16.6%, from 10220 tonnes to 11,917 tonnes. Exports to the EAC market also doubled although from a very low base (from 136 tonnes to 273 tonnes) (1).
A notable feature of EU poultry exports to the SADC EPA region was the increase in EU exports directly to Namibia and Mozambique, where imports more than tripled in 2017 from 2,249 tonnes to 7,773 tonnes. According to USDA analysis direct EU poultry meat exports to Namibia in 2017 would have been equivalent to almost six weeks supply of Namibian consumption, in a context where half of Namibian consumption is imported (3).
In would appear this development in part reflects the impact of South African import restrictions on imports from the EU, where an AI related ban on poultry meat from the Netherlands was in place (4). This saw only 2,141 tonnes of poultry meat imported into South Africa from the Netherlands in 2017 compared to 111,919 tonnes in 2016 (1). However it may also in part reflect the introduction of Namibian Avian Influenza related controls on imports of poultry meat from South Africa which gave rise to shortages of poultry meat in Namibia in the middle of 2017 (5).
A noticeable development in the EU poultry sector in 2017 was the increase in imports of poultry meat from the Ukraine, which grew 76% from 34,838 tonnes to 61,297 tonnes (1). This needs to be seen in a context where the main Ukrainian exporter owns processing plants in the EU, where Ukrainian bred chickens can be cut, packaged and exported as is they were EU originating chicken (see companion article ‘Growing Role of Ukraine in EU Poultry Meat Imports Raises Rules of Origin and SPS issues in EU Poultry Meat Export Trade’, 22 January 2018).
| Comment and Analysis
Current trends in EU poultry meat exports need to be seen in the context of the projected 17.6% increase in EU poultry meat exports from 2017 to 2030 (+ 261,000 tonnes) and, perhaps more significantly, the prospect of a ‘hard’ Brexit which could disrupt current UK-EU27 trade in poultry meat. Currently the UK exports around 250,000 tonnes of poultry meat to EU27 markets with this consisting largely of lower quality poultry parts. The EU27 meanwhile export around 580,000 tonnes of poultry meat to the UK market, mainly consisting of breast meat but also in tonnage terms substantial volumes of poultry parts. If a ‘hard’ Brexit occurs and standard MFN duties and standard EU regulatory controls were applied on mutual trade in agro-food products, then this trade in poultry meat would grind to a halt, with both UK and EU27 exporters looking around for alternative markets. For African countries seeking to develop their own poultry industries the greatest threat would come from UK exporters whose exports of poultry parts fit well with African patterns of import demand. However there would also be the threat of an import surge from EU27 exporters who trade poultry parts into the UK market. The expansion of exports of poultry parts to African markets in 2021 which a ‘hard’ Brexit could give rise to would dwarf the current projected 78,000 tonne expansion of extra-EU poultry meat exports up to 2022 (see companion article ‘Latest EC Projections Show Growing Export Orientation of EU Poultry Sector’, 18 January 2018) Depending on how the Brexit process evolves the trade displacement effects of Brexit are something which sub-Saharan African governments may need to pay close attention to from 2021 onward, since a ‘hard’ Brexit could generate a sudden surge in exports of poultry meat, as EU27 and UK producers seek out alternative markets. In this context it should be noted the Russian ban on imports of agro-food products from the EU introduced in August 2014, saw EU poultry meat exports to sub-Saharan African destinations increase from 531,438 tonnes in 2013 to 674,831 tonnes in 2016, an increase by 143,393 tonnes or some of 27%. This is indicative of the scale of the displacement of trade to African markets which can occur when existing patterns of EU exports suddenly face disruption. It remains to be seen whether Brexit induced trade disruptions will encourage the European Commission to insist on the full implementation of EPA commitments requiring ACP signatory governments to eliminate all quantitative restrictions on imports from the EU (see companion article, ‘Declining Prices of Dark Meat Intensify Competition for African Poultry Producers’, 1 February 2018) There are also concerns that the growing volume of EU poultry meat imports from the Ukraine could be generating exports of non-originating poultry parts to African markets under EU trade agreements, where they claim tariff preferences for which they are not eligible. This is a particular source of concern in regard to trade into Namibia where fully 89% of EU exports originated in the Netherlands, where Ukrainian poultry sector investment in the EU is concentrated. |
Annex
| 2016 | 2017 | % change 2016-17 | |
| South Africa | 259,810 | 74,514 | -71.3% |
| Namibia | 375 | 4,735 | +1,162.7% |
| Mozambique | 1,874 | 3,038 | +62.1% |
| Zambia | 1,478 | 1,748 | +18.3% |
| Zimbabwe | – | – | |
| Sub-Total Southern Africa | 263,537 | 80,035 | -69.6% |
| Benin | 115,608 | 105,878 | -8.4% |
| Ghana | 76,126 | 133,147 | +74.9% |
| Togo | 22,667 | 19,502 | -14% |
| Liberia | 24,531 | 40,407 | +78.3% |
| Niger | 4,379 | 2,330 | -46.8% |
| Guinea | 12,201 | 21,236 | +74.1% |
| Cape Verde | 8,113 | 10,478 | +29.2% |
| Sierra Leone | 1,736 | 6,391 | +268.1% |
| Ivory Coast | 2,733 | 5,871 | +114.8% |
| Mauritania | 2,109 | 8,940 | +323.9% |
| Guineas Biss | 2,241 | 3,775 | +68.5% |
| Nigeria | 299 | 210 | -29.8% |
| Senegal | 240 | 320 | +33.3% |
| Gambia | 174 | 4,313 | 2,378.7% |
| Mali | 76 | 44 | -42.1% |
| Burkina Faso | 114 | 103 | -9.6% |
| Sub-Total West Africa | 273,347 | 362,945 | +32.8% |
| DRC | 43,525 | 61,100 | +40.4% |
| Gabon | 31,310 | 48,007 | +53.3% |
| Congo | 30,986 | 33,244 | +7.3% |
| Chad | 139 | 69 | -50.4% |
| CAR | 1,038 | 2,834 | +173% |
| Equ Guinea | 11,031 | 15,486 | +40.4% |
| Cameroon | 179 | 452 | 152.5% |
| Angola | 8,994 | 9,138 | +1.6% |
| Sao Tome & Principe | 1,874 | 1,861 | -0.7% |
| Sub-Total Central Africa | 128,076 | 172,191 | +34.4% |
| Comoros | 10,220 | 11,917 | +16.6% |
| Madagascar | – | 25 | n.a. |
| Mauritius | 298 | 451 | +51.3% |
| Seychelles | 578 | 680 | +17.6% |
| Kenya | 67 | 41 | -38.8% |
| Tanzania | 48 | 140 | +19.7% |
| Uganda | 21 | 105 | +400% |
| Burundi | – | 27 | n.a. |
| Djibouti | 307 | 388 | +26.4% |
| Eritrea | – | 2 | n.a. |
| Ethiopia | 28 | 67 | +139.3% |
| Somalia | 207 | 229 | +10% |
| South Sudan | – | – | |
| Sudan | 300 | 212 | -29.3% |
| Sub-Total Eastern Africa | 12,074 | 14,282 | +18.3% |
| Total Sub-Saharan Africa | 674,831 | 629,455 | -6.7% |
| % share total extra-EU exports | 46.8% | 42.6% | |
| Sub-Saharan Africa (without South Africa) | 415,021 | 554,941 | +33.7% |
| % share total extra-EU exports | 28.8% | 37.6% | |
| Extra-EU Total | 1,442,683 | 1,477,588 | +2.4% |
Sources:
(1) EC; Market Access Data Base
http://madb.europa.eu/madb/statistical_form.htm
(2) SAPA, ‘South African poultry meat imports: Country report December 2017
https://www.sapoultry.co.za/pdf-statistics/country-report.pdf
(3) USDA, ‘Namibia’s Broiler Meat Consumption Expected to Increase Steadily’, 14 December 2017
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Namibia%E2%80%99s%20Broiler%20Meat%20Consumption%20Expected%20to%20Increase%20Steadily%20_Pretoria_South%20Africa%20-%20Republic%20of_12-14-2017.pdf
(4) SAPA, ‘Summary report of poultry imports for December 2017’
https://www.sapoultry.co.za/pdf-statistics/summary-imports-report.pdf
(5) thepoultrrysite.com, ‘Namibia Eases Restrictions on Poultry Imports’, 31 July 2017
http://www.thepoultrysite.com/poultrynews/38970/namibia-eases-restrictions-on-poultry-imports/