February 13, 2020

 

South Africa to impose tariffs on poultry imported from US and Brazil

 

The new measures are aimed at boosting domestic poultry production, which has been impacted by rising imports of cheap chicken, reported Bloomberg.

 

According to IzaakBreitenbach, a general manager of the South African Poultry Association, Ebrahim Patel, South African Minister of Trade and Industry Ebrahim Patel has confirmed the new tariffs that will be imposed soon.

 

The South African Poultry Association called for tariffs to be imposed on poultry imports from the United States and Brazil shipments entered South Africa under-priced to avoid import duties. The domestic poultry industry suffered losses of 6.5 billion ZAR (~US$436 million; 10 ZAR =US$0.67).

 

383,000 tonnes of chicken were imported into South Africa in 2018, not including deboned meat for processed food. This accounted for 19% of the country's total supply.

 

South African Poultry Association called for tariffs to increase from 37% to 82% for frozen bone-in chicken pieces and from 12% to 82% for frozen boneless chicken cuts, but the actual imposed tariffs have not been confirmed. The tariffs will be advised by the International Trade Administration Commission of South Africa (ITAC).

 

ITAC said the tariff increase will consider the entire value chain for the country's agricultural products and the possible inflation effects on consumers.

 

In November, the government and industry representativessigned off on a plan to boost production facilities by end 2020. Companies committed to invest 1.5 billion rand (~US$100.8 million), creating close to 4,000 jobs.1.7 billion rand(~US$114 million), was also allocated for producers to help create and sign contracts with 50 new farmers.

 

Breitenbach said South Africa's poultry industry is its second-largestagricultural sector, with 110,000 employed.

 

A free trade agreement with the European Union means the new tariffs will not apply to that region. A 2015 poultry dispute that could have expelled South Africa from the US African Growth and Opportunity Act (AGOA) means that the United States will be able to export 65,000 tonnes of frozen bone-in chickens for free.

 

AGOA gives duty free access to the United States for 39 African countries for the export of 6,500 products. These include manufactured items and textiles.

 

South Africa's market access in the United States' Generalized System of Preferences is currently under review. The system is the largest and oldest trade preference program for poorest economies in the world. If South Africa is removed, South African exports worth US$2.4 billion are at risk.

 

-      Bloomberg