37 000 jobs lost to grey chicken imports

Roleplayers in the poultry industry have for some time reported chicken in the retail sector which they say do not 'belong' in the local market. There appears to be some discrepancy because import and export figures for 2018 indicate that just over 4 800 tonnes remained in the local market without any legal import permits having been issued.Since May 2015, Namibia allows a maximum of 1 500 tonnes of chicken to be imported monthly in a bid to protect the local broiler industry. Namibian producers can provide roughly 80% of the local demand, the bulk of which is provided by Namib Poultry Industries (NPI). Namibians consume roughly 2 500 tonnes of chicken monthly and local production provides an average of roughly 2 000 tonnes of this. These figures vary from month to month, though.Until the end of July this year, the Meat Board of Namibia had issued permits to local importers on a monthly basis, based on a quota system. This system, according to Magda van Schoor, spokesperson for the Meat Board, “is determined on a bi-monthly basis by evaluated supply and demand. Individual quota is calculated based on a company's historic market share (70% of the quota) and local purchases (30% of the quota). The inclusion of local purchase in the calculation of the quota allows new entrants to acquire quota and motivates local buy.”Willem Schutz, the operations manager at Meat Board, told Namibian Sun that import permits for 11 261 tonnes of chicken were granted in 2018.But these figures do not correlate with those provided by the NSA, based on those provided by Customs and Excise. For 2018, those figures indicate that 16 077 tonnes of chicken were imported into Namibia. That leaves a difference of 4 816 tonnes that remained in the local market, unaccounted for and apparently illegal.Well-placed sources told Namibian Sun that this figure most likely represents chicken that is in transit. For example, chicken destined for Zambia arrives at a South African port in bond. The chicken is transported out of South Africa, whereupon the bond is settled. It then enters Namibia on its way to Zambia. “During this time, it 'falls off the truck',” one source said.Of great concern is the revelation that Namport is the preferred port for chicken in transit, which is indicative of a bigger loophole. The porous border with Angola has also been mentioned as a challenge, although this chicken would not form part of the listed imports.The presence of illegal chicken in the retail market is very costly – not only to the Southern African Customs Union (SACU) and the Namibian Revenue Agency but also to the local economy, and the damage runs into hundreds of millions of dollars.Informal calculations indicate that for an SME or informal trader, raising chicks and selling them as adult chickens creates 1.5 jobs for every 100 chickens sold.Working on a rounded 5 000 tonnes, and at an average of 2 kg per whole chicken sold, 2 500 000 chickens entered the country illegally in 2018. If 1.5 jobs are created per 100 chickens sold, Namibia lost, in its SME and informal sector, 37 500 jobs during the course of 2018.Taken at a minimum wage of N$2 500 monthly, the total losses in income stand at N$93.75 million.In SACU revenue (37%), the losses stand at N$37 million and for local input VAT of 16.5%, the losses to Namibia's coffers stand at N$16.5 million.Total losses in income stand at more than N$150 million per year due to illegal poultry imports.Moreover, statistics provided by Day-old Chicks Namibia indicate a drop in purchases and income from emerging producers as import permits increased. Taking into account the lag of 30 days to get the chick to adulthood, December 2018 to January 2019 figures dropped quite sharply. The Meat Board issued import permits for 808 tonnes in October last year, 1 181 tonnes in November and 1 113 tonnes in December 2018. The average for the year stands at 938 tonnes per month.The NSA figures indicate that 16 993 tonnes of whole chicken was imported into the country in 2018, with 9 541 tonnes leaving the country. Chicken portions and edible chicken offal totalled 107 tonnes imported and 0.952 tonnes exported. Imports of frozen portions and offal totalled 19 400 tonnes, with 10 889 tonnes exported.However, the Comtrade data from the United Nations further compounds matters.This data is collated from source and destination countries which report what they have exported or imported and where to or from. Hence, if the country of destination does not report, Comtrade uses the reporting country's data. According to their 2018 figures, a whopping 27 795 tonnes of chicken meat and edible offal was imported into the country. Source countries include Brazil, South Africa, Germany, Hungary, Italy, Taipei, the Netherlands, Poland, Portugal, Spain, Turkey, the UK, the USA, Canada, Argentina and Belgium. Comtrade's data includes transit and bonded chicken (chicken not destined for the Namibian market), and does not indicate the exported tonnage. The data appears to be correct as it correlates well with the data from the South African Revenue Service's figures for exports from that country to Namibia.Schutz told Namibian Sun that the Meat Board does not handle bonded chicken and is responsible only for imported chicken. One source, who preferred anonymity, believes the challenge comes in with transit chicken. In this case, the bond is settled and once the chicken arrives in transit in Namibia, it stays. Chicken coming into the country under local bond generally exits, the source says, because of the possibility of financial losses incurred.“Unless of course, under-reporting the tonnage of the bonded chicken at customs takes place,” the source told Namibian Sun.Rene Werner, the chair of the Poultry Producers' Association, concurred with the figures as provided by the NSA but added: “At the moment, it looks to us that no one knows which data or information is correct or wrong”. He agreed that roughly 5 000 tonnes of chicken were in transit and had to leave the country, but never did.“Just imagine how much poverty we could eradicate if those metric tonnes imported could be produced locally,” Werner said.Pieter van Niekerk, commercial manager at Namib Mills, told Namibian Sun that they “have definitely seen an influx of imported product in the market while locally produced poultry is being stockpiled”.Stockpiles at NPI stand at 2 000 tonnes at the moment.He added that the matter is addressed regularly within the industry with stakeholders, but expressed concern over illegal imports. “It not only damages local producers, disadvantages legal traders and reduces revenue to government, there is also a real risk to consumers due to a poor and possibly dangerous product.“Illegal trading should not only be seen as an attack on one industry but rather an attack on Namibia as a sovereign nation which has the right to decide its own path,” Van Niekerk said.The finance and agriculture ministries did not respond to questions sent. YANNA SMITH

37 000 jobs lost to grey chicken imports

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Namibian Sun 2025-04-04

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37 000 jobs lost to grey chicken imports

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Namibian Sun 2025-04-04

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