A global slowdown in demand for agricultural produce has raised concerns about dumping in the SA market, which poses a potential threat to the local agri sector.
That’s according to executive director of Agri SA, Omri van Zyl, who says the slowdown has led to stock surpluses and over-capacitated storage facilities – resulting in increased export volumes to low-value markets.
“Not only does this pose a potential threat to the South African agri sector, but also creates opportunities for illicit trade,” he says.
“Surges in the imports of frozen produce such as chicken and potatoes will place increased pressure on local farmers, negatively impacting their livelihoods and those of the people they employ.”
He warns that dumping could endanger the growth outlook of one of the country’s most viable industries.
“Farmers are price takers, and with margin pressures mounting, dumping would be catastrophic for several commodities,” said Van Zyl.
As the economy opens up, the pressure caused by the closure of Quick Service Restaurants (QSR), hospitality and tourism industries will be alleviated to an extent, however the chicken and frozen industry remains at risk. Under lockdown levels 5, 4 and 3, the demand for frozen chicken declined by 18%, 13% and 7% respectively.
