Thursday,23 May, 2019
Current issue | Issue 1323, (8 - 14 December 2016)
Thursday,23 May, 2019
Issue 1323, (8 - 14 December 2016)

Ahram Weekly

Chickening out on tariffs

Customs on imported poultry will not be lifted, according to a government decision this week, reports Doaa Farid

Al-Ahram Weekly

The cabinet cancelled a temporary decree to lift custom tariffs on poultry imports on Monday after Prime Minister Sherif Ismail met earlier this week with local poultry producers and representatives from the Federation of Egyptian Industries who had strongly objected to the lifting of the tariffs.

Local poultry producers who did not raise the prices of their products after the devaluation of the pound in March or its floatation in November, lifting tariffs on poultry imports would threaten their business, they said in their meeting with the prime minister, adding that the government should have discussed plans to cancel the tariffs with them first.

Cabinet spokesperson Ashraf Sultan said in an interview this week that the main reason behind lifting the tariffs was to control any price increases of poultry products, including chicken and eggs, following the pound’s devaluation.

But MP and poultry producer Ehab Ghataty said the government had taken its decision based on the “misleading” information of a 25 per cent shortage of poultry in the markets.

Head of the Federation of Egyptian Chambers of Commerce Ahmed Al-Wakil said on Monday that the cabinet had exempted poultry imports from tariffs based on a study submitted by the Federation to reduce the impact of the floatation on market needs.

Al-Wakil is himself a poultry importer, rumors said he would have benefitted from the lifting of the tariffs. However, Al-Wakil said that he had stopped importing poultry in 2010 in an interview this week.

Following the withdrawal of the decision, Deputy Head of the General Union of Poultry Producers Mohamed Al-Shafei said that there would be no increase in the prices of poultry products. Poultry producer Sayed Hassan said production would be doubled to meet market needs, adding that the producers would supply chickens to the Ministry of Supply at LE20 per kilogram, which is less than the current market price of LE26.
Head of the Poultry Chamber at the Federation of Egyptian Chambers of Commerce Abdel-Aziz Al-Sayed told Al-Ahram Weekly that poultry producers would not lose if they kept this promise. “The difference between prices will be borne by a fund from the General Union of Poultry Producers financed through annual membership fees,” Al-Sayed said.

“This fund should only be used to support small farmers who are most in need,” he said.
Some analysts and business leaders have supported the decision to lift tariffs on poultry imports. Owner of a poultry shop in the Agouza district of Cairo Hamdi Al-Zamzamy said he was not afraid of competition with imported poultry. “We know that Egyptians prefer local chicken because they know its source,” he said.

“The imported poultry has its own specific customers,” said Mohamed Ibrahim, a supervisor in a hyper-market in the Haram district that sells imported poultry. Ibrahim said the imported product was deemed easier to cook by some customers.

Poultry producers have been facing shortages since the outbreak of bird flu in Egypt in 2006. Producers need vaccines every winter to prevent further outbreaks of bird flu among flocks and workers in the sector.

According to a recent study by the Ministry of Trade-affiliated organisation International Trade Point (ITP), Egypt has between 22,000 and 30,000 poultry farms. The value of investments in the sector is reported to be LE25 billion and it employs around two million workers.

Egypt’s poultry producers also import feed for their chickens, such as corn and soybeans, on which they pay tariffs.

Professor at the Animal Production Research Institute (APRI) Ahmed Hussein Abdel-Meguid told the Weekly that poultry producers imported the feed as it was cheaper than the local alternative.

Chicken feed comprises 80 per cent of the cost of poultry production, according to Abdel-Meguid, who said that 20 per cent of the feed could be locally substituted.

In order to address this issue, the General Union of Poultry Producers said on Monday that it would establish a marketing company that would handle production inputs and supply them to producers and also distribute poultry directly to consumers.

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