Month on month egg consumption in South Africa has declined this year following half a decade of significant growth. Yet, as the year draws to an end, consumption is expected to rise again.

The egg industry in South Africa is undergoing a period of change, as noted by Magda Prinsloo of the Southern African Poultry Association in a recent report submitted to the International Egg Commission. While consumption last year rose by only 0.25 percent, this low increase followed a period of five which saw per capita consumption increase by 33 percent.

Table 1: Per capita consumption of eggs 

If taken as a whole, 2009 is expected to end with a decrease in consumption, yet there exists considerable opportunity in South Africa for an increase in per capita consumption, particularly taking into account the price competitiveness of eggs as a protein source compared to other animal proteins, Ms Prinsloo notes.

South Africa’s total egg production is thought to have contracted each month between June 2008 and July 2009. For August, this trend is thought to have reversed. Together with falling output and slowing increases in consumption on the home market, producers have also had to deal with higher feed prices, which rose by 32.2 percent in 2008.

Table 2: Cases of eggs per week per month 

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Higher maize and protein prices, driven particularly by higher bioethanol production in the US, saw the average layer feed price reach RAND 2,466.30 ($298.04) per ton last year, an increase of almost a third compared with 2007.

Legal framework

Producers are also having to deal with a changing legislative environment, expected to have both a positive and negative repercussions.

Environmental impact assessment procedures relating to the National Environmental Management Act of 1998 are now under review. The regulations governing these procedures are thought to have been a major constraint on growth, so any review is welcome. Regulations governing the packing and marking of eggs for sale within South Africa are also in the process of being reviewed, along with standards for exports, and those for barn and free range products. Rules under discussion on packaging and advertising under the country’s foodstuffs, cosmetics and disinfectants act are expected to have a major effect on producers once they come into force, and producers will have to respond accordingly.

Export opportunities

In the international arena, South Africa’s producers are gaining greater market access. The country is a member, together with Botswana, Lesotho, Namibia and Swaziland, of the Southern African Customs Union (SACU), The SACU countries are also members of the Southern African Development Community (SADC), which is in the process of implementing a free trade agreement.

SACU members grant tariff-free access to its SADC partners, while the latter are in the process of phasing in reductions in their tariffs. SACU has a common external tariff which does not apply to eggs in the shell, but does apply to egg products.

SACU has also entered into a free trade agreement with the European Free Trade Association (EFTA) under which Switzerland and Norway will grant limited tariff preferences on imports of eggs and egg products from SACU, but SACU will not grant preferences on these products. The agreement came into effect in May last year. SACU is also examining trade agreements with India and China.

South Africa has also entered into a Trade Development and Co-operation agreement with the EU. Under this agreement, the EU will have phased out its tariffs on South African eggs and egg products by next year, while South Africa will have done the same for the EU’s egg and egg product exports by 2012.

South Africa still only exports a small number of eggs, but the country has established a framework that would allow exports to grow.