South Africa’s poultry industry is increasingly exposed to global trade politics, with renewed uncertainty around the African Growth and Opportunity Act (Agoa) compounding pressures from rising input costs, disease risks and weak consumer demand. In its annual report for the year to end-September, Astral Foods said uncertainty over Agoa and US trade concessions was undermining investment, employment and long-term planning in the local industry. Agoa officially expired at the end of September this year after a final 10-year extension passed in 2015.
This effectively cut duty-free access to the US for eligible sub-Saharan countries, subjecting South Africa to tariffs of up to 30%. At the centre of the dispute is the long-standing quota allowing up to about 72,000 tonnes of US bone-in chicken to enter South Africa annually at preferential rates. According to Astral, these imports are often priced below the cost of production, distorting the market and eroding the viability of domestic operations.
Astral chair Theunis Eloff said in his letter to shareholders that while Agoa has benefited export-orientated sectors such as automotive and citrus, poultry has repeatedly been “used as a bargaining chip” in trade negotiations. With Agoa’s future uncertain beyond 2025, the risk to local producers has intensified. “Agoa has long served as a strategic trade instrument for South Africa, granting duty-free access to the US market for a range of exports.
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However, the poultry sector has borne the brunt of concessions made under Agoa, particularly the allowance of up to 72,000 tonnes of US bone-in chicken imports annually at preferential rates. “These imports, often priced below market value, have significantly disrupted local production, leading to job losses and undermining investments made under the poultry sector master plan,” he said. “With Agoa’s renewal uncertain beyond 2025, stakeholders are calling for greater transparency, reciprocal trade terms and protective measures to ensure the long-term viability of South Africa’s domestic poultry industry.” Astral’s own workforce numbers have declined 19.7% in the year under review, with employee headcount dropping from about 3,755 to 3,015 in parts of the business, reflecting the strain on operations as margins remain thin and volatility persists.
This can be partly linked to one of the company’s key material risks: employees and conditions of employment, listed as a critical concern in its risk register. In its business risks and material matters report, Astral identified the availability and sustainability of critical poultry skills and the ability to maintain stable employment conditions as a top six risk.
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