Summary
Avian flu outbreaks have left overall EU poultry meat production largely unaffected. Although AI related restrictions reduced EU poultry meat export volumes in the first half of 2017, particularly to South Africa the largest single export destination (-63%). Export growth to Gabon, DRC and Ghana while extremely high (+120%;96% and 69% respectively) could not outweigh declines in EU exports to South Africa and Benin. Beyond the current AI crisis in the EU, expanding imports of whole birds from Ukraine, the impact of lower feed costs on EU production and possible Brexit related disruptions of the EU27-UK poultry trade, could all fuel a further expansion of EU exports to Africa. This could continue to inhibit efforts to promote local poultry sector development across Africa. Patterns of Belgium poultry meat exports suggest African governments need to pay closer attention to the origin of poultry meat imports nominally originating in particular EU member states.
Figures from the EC posted towards the end of August 2017, reveal that despite the outbreak of avian flu (AI) in a number of EU member states, EU poultry meat production rose 1.2% between January and May 2017 compared to the corresponding period in 2016, with this growth continuing into June and July. Only in August were EU poultry meat production levels below the level of the corresponding month in 2016. This does not mean the poultry meat production was unaffected in the EU, with production falling in Germany, France, Holland, Italy, Denmark, Hungary and Bulgaria. However these declines were out-weighed by the expansion of production in other EU member states (1).
On the export side from January to June 2017 the total volume of extra-EU poultry meat exports were down 1.2% on the corresponding period in 2016. Exports to certain ACP countries were severely affected by the AI outbreaks in the EU, particularly to the EU’s main export destination for poultry meat South Africa. While in 2016 South Africa took fully 16.7% of total extra-EU poultry meat exports, in the first 6 months of 2017 EU export volumes were down 63% as a result of the AI related import restrictions introduced in South Africa. This saw with South Africa taking only 6.5% of extra-EU poultry meat exports from January to June 2017 (1).
However not all EU poultry meat exporters have been equally affected by South African import restrictions. According to the South African Poultry Association (SAPA), while avian influenza has reduced Dutch, German, Polish, Hungarian and UK exports to South Africa to almost zero for most of 2017, ‘Belgium and Ireland increased exports to South Africa, in the absence of other EU nations, to account for 8.2 % (22 428 t) and 4.6 % (12 644 t) of 1H 2017 imports, respectively’. SAPA has observed ‘it seems that Belgian imports increase when other EU countries are affected by AI-related trade bans and decrease once these bans are lifted’ (2). In July 2017 Denmark was also exporting poultry meat to South Africa with a volume 3.4% higher than in the corresponding period in 2016. Poland is expected to resume poultry meat exports to South Africa once AI related import restrictions are lifted. (2).
Overall reflecting the AI related import restrictions in the first half of 2017 only ‘ ‘19.5 % of poultry imports entered SA through the EU…. compared to 48.1 % in 2016 and 47.1 % in 2015’. Since December 2016, ‘Brazil has been the main country of origin for South African poultry imports’, accounting for 52% of South African imports in the first six months of 2017, with Brazilian poultry meat exports ‘20.1 % higher than in the first 7 months of 2016’ (2).
In addition to reduced exports to South Africa, the first half of 2017 also saw a 19% reduction in EU exports of poultry meat to Benin, which would appear to be related to increased Nigerian efforts to curb smuggling across the border from Benin underway since 2015 (1).
Elsewhere in Africa however destinations in the top ten countries for EU poultry meat exports saw increased volumes of exports. From January to June 2017 EU poultry meat exports to Gabon, the DRC and Ghana were up 120%, 96% and 69% respectively, taking these countries to 9th, 8th and 3rd in the top ten ranking of destinations for EU poultry meat exports. These increased exports however did not out-weigh the decline in exports to South Africa and Benin, with as a consequence the collective share of these five Africa countries in total extra-EU poultry meat exports falling from 33.5% in 2016 to 28.9% in from January to June 2017. This took the share of these five African markets in total extra-EU poultry meat exports to their lowest level in five years (1).
Extra-EI Poultry Meat Exports to Selected Destinations
| 2013 | 2014 | 2015 | 2016 | Jan-Jun2017 | Compared to Jan-June 2016 | |
| Extra-EU | 1,428,470 | 1,503,984 | 1,489,430 | 1,616,031 | 774,346 | -1.2% |
| South Africa | 158,548 | 203,412 | 213,577 | 270,157 | 49,996 | -63% |
| Benin | 139,247 | 163,84 | 138,414 | 116,882 | 52,288 | -19% |
| Ghana | 75,252 | 56,900 | 68,283 | 77,159 | 58,606 | +69% |
| DRC | 28,625 | 33,697 | 35,269 | 44,465 | 29,744 | +96% |
| Gabon | 25,070 | 29,409 | 37,330 | 31,140 | 26,984 | +120% |
Source: EC, ‘EU market situation for poultry: Committee for the Common Organisation of the Agricultural Markets’, 24 August 2017
https://ec.europa.eu/agriculture/sites/agriculture/files/poultry/presentations/market-situation_en.pdf
EU poultry meat imports meanwhile were down 9.3% from January to June 2017 compared to the corresponding period in 2016, with a 15% decline in imports from Brazil and a 12% decline in imports from Thailand. These two countries accounted for 85.1% of EU poultry meat imports during this period, slightly down on the average of the preceding 4 years, which averaged around 90%. This is attributable to increased EU poultry meat imports from the Ukraine, which since 2013 have risen from virtually nothing to a 5.3% share of total EU poultry meat imports in 2016 ( 48,080 tonnes) and an 8% share from January to June 2017 (1). These import volumes are set to increase as Ukrainian poultry sector exporters strengthen their position on the EU market through a series of corporate alliances, investments and acquisitions, aimed at consolidating current trade flows in poultry meat and newly slaughtered birds, which are then processed in the EU (3).
An additional noteworthy trend is the emergence of South Africa as a poultry meat exporter to the EU, with export volumes from January to June 2017 in excess of total export volumes in the preceding four years combined (2,088 tonnes compared to 1,782 in total in the four years from 2013 to 2016).
| Comment and Analysis
The lifting of AI related import restrictions is likely to see a resurgence of EU poultry meat exports to South Africa, despite the safeguard duties imposed by the South Africa government in December 2016 (see companion article ‘Will South Africa’s introduction of poultry safeguard duties by challenged by the EC?’, 23 February 2017). This will be aided by the on-going AI crisis in South Africa itself (4). This is likely to see a strong recovery in overall EU poultry meat exports to South Africa in the second half of 2017. These renewed EU exports of poultry meat to African markets could be further fueled by the increased export of Ukrainian birds for slaughter in the EU. This is particularly the case given the demand structure in the EU (mainly for breast meat) and the structure of EU poultry meat exports to Africa (mainly frozen poultry parts). As the August 2017 EU poultry market report highlights the value of EU poultry meat imports exceeds the value of EU poultry meat exports by 16.6%, despite the volume of EU poultry meat exports being 77% higher than the volume of EU poultry meat imports. This highlights the low average value of EU poultry meat exports relative to the value of EU poultry meat imports. It is noteworthy that the average value of EU poultry meat exports from January to June 2017 was 18.5% below the average value in the first six months of 2015, while the average value of EU poultry meat imports was only 11.6% lower over the same period. This throws into a different light the safeguard duties of 13.9% imposed by the South African authorities in December 2016, since this level of price decline fundamentally undermines the effectiveness of such safeguard duties. Average Price of EU Poultry Meat Exports and Imports (€/kg)
The problem posed by low cost EU poultry meat exports to African efforts to develop their own local poultry production looks likely to continue. This is particularly likely given: · the low grain prices which are reducing EU poultry meat production costs and fueling a further expansion of production in low cost grain producing member states · the growing trade in whole bird imports into the EU form Ukraine; · the possible trade disrupting effects of Brexit on EU27-UK poultry trade. It should be noted that while low grain prices may stimulate EU poultry meat production the residual nature of the EU trade in frozen poultry parts means the price at which this meat is sold on African markets bears no relationship to the underlying costs of poultry production in the EU. The SAPA observation in regard to the increase in imports of poultry meat from Belgium whenever AI bans are introduced on imports from other EU member states and a corresponding decline in imports from Belgium when these bans are lifted, raises questions about the origin of these Belgian meat imports. Do they all originate in Belgium or are they sourced from other EU member states or even imported from beyond the EU’s borders via Holland before being re-exported as Belgian poultry meat? This potentially raises important rules of origin and SPS control questions. |
Sources:
(1) EC, ‘EU market situation for poultry: Committee for the Common Organisation of the Agricultural Markets’, 24 August 2017
https://ec.europa.eu/agriculture/sites/agriculture/files/poultry/presentations/market-situation_en.pdf
(2) South African Poultry Association, ‘South African poultry meat imports: Country report July 2017’,
https://www.sapoultry.co.za/pdf-statistics/country-report.pdf
(3) Agrimoney.com, ‘Germany next target as Ukraine poultry industry expands in EU’, 14 Sept 2017
http://www.agrimoney.com/news/germany-next-target-as-ukraine-poultry-industry-expands-in-eu–11018.html
(4) Business Report , ‘South Africa’s poultry industry is hurting as avian flu worsens’, 30th August
https://www.iol.co.za/business-report/south-africas-poultry-industry-is-hurting-as-avian-flu-worsens-10998299
| Key Words: Poultry, EU South Africa, Benin, Nigeria, Ghana, DRC, Gabon, Ukraine Area for Posting:Poultry, Southern Africa, West Africa, Central Africa, Brexit |