Ban on Poultry Products Driving Prices Up in Mozambique

Mon, 07 Aug 2017

MOZAMBIQUE - The ban imposed in June by the authorities on imports of all birds and their derivatives from the Democratic Republic of Congo, South Africa and Zimbabwe in the wake of an outbreak of avian flu in those countries is driving prices up in Mozambique.

AllAfrica reports that the ban has forced domestic suppliers to resort to eggs imported from European markets for the production of day old chicks. However, this entails more costs and, consequently, higher prices for chicks.

Higest, a Mozambican company based in the outskirts of Maputo, is one of the leading producers in the market and confirms the price increase, reports the daily paper "O Pais".

"The chicks we started to produce and marketing this week will have higher production costs, which we estimate to be between 20 and 25 meticais (one US dollar is equivalent to about 61 meticais at current exchange rates)," explained Américo Marques, commercial director.

According to Mr Marques, there are a number of issues that contribute to higher costs of importing eggs from Europe, such as air transportation and clearance costs at the customs.

"It's a commodity that does not originate within the SADC region", he explained.

In fact, most products manufactured within the Southern Africa Development Community (SADC) Africa are exempt from import duties as long as they originate within the region as stipulated in the regulations of the Free Trade Area.

Mr Marques explained that this will directly affect the informal market.

"There are restrictions. The number of chicks is not the usual, both from the part of Higest as of from other companies (suppliers).

Therefore, not all the poultry farmers will have the number of chicks that they would desire. And those who get them will have to pay an extra amount per chick, which will be 55 meticais up from usual 35 meticais."

He said that the increase in prices for day old chicks will is expected to last until the mid of August, when the company will resume producing day old chickens with eggs imported from South Africa, and then prices will come down to normal.

Higest used to produce 700 to 800 thousand chickens per month, with eggs imported from South African. However, the number fell 50 per cent with eggs imported from Europe. Still, the company guarantees that it has enough stock to last for a month and a half and reassures that it will not increase the prices of frozen chicken.

"At the moment, we have stocks of frozen chicken and we will not stop production of chickens. Our slaughterhouse will continue to receive chickens, which will be producing with what we already have, and will be enough so that the end consumer will not see any price increase on frozen chicken or shortage of availability," he said.

However, "O Pais" writes that a short tour in Maputo markets shows that prices of frozen chicken are on the rise. Informal chicken traders say they have been forced to raise prices because of the ban imposed on poultry imports. They also complain that they are just piling losses, since the new price has driven customers away.

Julia sells frozen chickens in the informal market of Fajardo since 1992. She says there have been times when the business was profitable, but nowadays, due to several factors, including the ban on poultry imports, buying prices rose about fifty meticais.

Therefore, she forced to pass the costs to consumers with negative impact on sale volumes. "The business has become unsustainable. We are here just to make ends meet," she said.

Until recently frozen chicken was sold at the average price of 190 meticais. But prices increased by 50 meticais since the ban.

This situation may change over the next few weeks with the 20 July decision of the National Veterinary Directorate in Mozambique's Ministry of Agriculture to lift the ban on the import of chicken eggs from South Africa, subject to certain conditions.

A note from the National Veterinary Directorate explains that the eggs are required to come from sources that are certified to be free from avian influenza and fit for export based on the results of laboratory tests undertaken since 22 June.

However, a ban remains in place which prohibits importing or transporting all birds and their derivatives.

Zimbabwe and South Africa have taken measures to control the spread of the disease, including destroying birds in affected farms, stepping up disinfection procedures, and investigating all suspect deaths.