RCL Foods, which owns Rainbow Chicken and makes Yum Yum peanut butter and Ouma rusks, is scaling back its chicken portfolio as more imports wing their way to South Africa. The food group, once only a poultry producer, said this week that the underperformance in its chicken business had been affected by a glut in the market.This would be exacerbated by the expected 65000 tons of poultry to be imported from the US in line with the African Growth and Opportunity Act, said industry players, including RCL Foods, this week.Finance chief Rob Field said RCL Foods had been working on downscaling its chicken portfolio for two years.In its interim results announced this week, the company said that apart from the severe drought affecting input costs, underperformance was exacerbated by widespread dumping. In response, the chicken unit has been successful in reducing its cost base to mitigate against the lower revenue, RCL Foods said in a statement this week."Two years ago we would have had fivemillion birds a week coming through our system, but we are down to less than 4.5 million," Field said.He added that the chicken business had shrunk as part of the overall business, representing about R4-billion of about R12-billion of group revenue and only 19% of the profit in the reporting period.story_article_left1RCL has reduced its exposure from individually quick-frozen portions by 20% of its chicken mix in the past two years, as most of the imports are IQF quarter leg portions.Field said: "RCL Foods is intent on reducing our exposure to what we call consequential product lines such as the IQFs, which is a classic commodity and competes directly with the imported leg quarters that are dumped in the market."Astral Foods, the country's largest chicken producer, said in November last year that its product mix improvement had resulted in a 2% reduction in IQF products and a 2% increase in fresh chicken.On US imports, Astral Foods CEO Chris Schutte said: "What is concerning is that the cost to produce in America is currently way below the cost of production in South Africa because of our poor maize crop and the weak currency."In the next week, before the March 15 deadline set by US President Barack Obama, more than 16000 tons of US poultry are expected to land on our shores. This will be the first batch of 65 000 tons annually.Agoa provides duty-free market access to the US for qualifying sub-Saharan countries by extending preferences on more than 4600 products.Obama said last month that South Africa's agricultural benefits under Agoa would be suspended if it did not comply with US poultry import conditions.Telecommunications and Postal Services Minister Siyabonga Cwele said South Africa was working with stakeholders to facilitate the first shipments.David Wolpert, CEO of the Association of Meat Importers and Exporters, said the imports would not affectlocal producers because they were merely a substitute. About 180 000 tons of bone-in chicken imports made their way to South Africa last year. "It is not a game-changer. [It] will barely replace products from the EU, Brazil and others."South African Poultry Association CEO Kevin Lovell said all imports affected local producers. "We are capable of producing enough chicken for our own market only if we can afford to. We are battling with input costs."..