March 16, 2020

South Africa increases tariffs on poultry imports

South Africa raised poultry import tariffs to assist domestic producers battling cheaper imports, but the measure was criticised by the US government, reported Bloomberg.

South Africa's National Treasury announced increased import tariffs for bone-in chicken pieces from 37% to 62%, which exceptions for the European Union and members from the Southern African Development Community because of existing free trade agreements.

Import tariffs for frozen boneless chicken cuts also rose from 12% to 42%.

According to government data, 383,000 tonnes of chicken were imported by South Africa in 2018, accounting for 19% of its total supply. This does not include meat that was deboned mechanically for use in processed food.

The South African Poultry Association urged the government to impose poultry import tariffs as high as 82% due to the impact cheaper US and Brazil poultry has on the domestic industry. The associated said the South African poultry industry suffers annual losses of of 6.5 billion ZAR (~US$393 million; 1 ZAR = US$0.061) because of cheaper imports.

The US government is reviewing South Africa's positionin its Generalized System of Preferences. Removing South Africa's market access would mean a loss of US$2.4 billion worth of South African exports to the US.

In 2015, the US government proposed to remove South Africa from its African Growth and Opportunity Act, which gives 29 African countries duty-free access for 6,500 products. As a result, the US government was allowed up to 65,000 tonnes of tariff-free exports of bone-in chicken portions to South Africa.

Back in November 2019, government and industry representatives in South African signed off a 1.5 billion ZAR (~US$95 million) investment plan to boost poultry production in the country.

-      Bloomberg