August 31, 2012

The South Africa Poultry Association would request the government to put import tariffs on additional chicken cuts and shipments from more nations.

The association wanted anti-dumping measures to be extended to leg quarters, which made up 80% of poultry imports, from nations including Brazil, Argentina and EU members, Rainbow Chicken's managing director Scott Pitman said.

The SA Poultry Association, of which Rainbow is a member, would also ask the International Trade Administration Commission (Itac) to reinstate import duties of as much as 63% on Brazilian whole chicken and boneless cuts, which started in February and lapsed on August 10, he said.

Grain prices have risen to a record as crops were damaged by the worst drought in almost 50 years in the US, the biggest producer. Poultry companies' feed, which comprises more than half of their costs, has surged as a result, while a 41% jump in imports of chicken meat in the year to June has cut producers' ability to increase prices and recoup expenses.

"When one looks at the shock of the impact in terms of all chicken manufacturers, there has to be an increase in price over the foreseeable future," Rainbow chief executive Miles Dally said.

Itac said on August 2 that its final report on its investigations into the Brazilian imports had been presented to Trade and Industry Minister Rob Davies. Brazil filed a dispute against South Africa with the World Trade Organisation regarding the tariffs in June.

Pitman said the poultry body would ask that the tariffs be reinstated in "the next couple of months", and would make its application on leg quarters "in the foreseeable future".

Revenue grew 13% in the year to June, while headline earnings a share fell 11%, Rainbow said after the market closed on Tuesday (Aug 28). The headline profit margin fell to 7.8% from 8.9% in the 15 months to June 2011.

The shares fell 2.1% to ZAR14.20 (US$1.67) on the JSE.