July 26, 2022
Poultry association urges South Africa to renew anti-dumping duties
The South African Poultry Association (Sapa) is calling on South Africa's Minister of Trade and Industry, Ebrahim Patel, to renew anti-dumping duties.
Sapa said that the duties expired and this places the poultry industry in serious risk of predatory trade practices such as dumping.
"To date, of all the signatories to the Poultry Sector Master Plan, Sapa can report the most progress and most successes and can showcase material growth and transformation of the local poultry industry – including improvements throughout the value chain," Sapa said.
Some of these successes, according to Sapa, include:
- Sapa and its members have invested more than R1.5 billion (US$89.4 million) in expanding poultry processing capacity in the local industry, with an additional R570 million (US$34 million) earmarked to be invested during the course of 2023. This supports food security, local job creation, rural development and additional revenue for the fiscus;
- Beyond investing in the sector's industrial development, emerging black farmers and contract growers have also been supported with an injection of R474 million (US$28.3 million) in additional cash flow. Additionally, the industry has increased market capacity to afford market access to both established contract growers and emerging black farmers;
- While on the path to transforming the local industry to be more inclusive, contract growers have invested over R650 million (US$38.7 million) in poultry houses for black poultry farmers who are currently farming more than 16.8 million birds;
- Since signing the Poultry Sector Master Plan in 2019 (and despite the severe market restraints and economic contractions imposed by COVID-19), the South African poultry sector has added 1 465 new jobs, with an additional 800 in the pipeline as investments come online in 2024. Moreover, the growth of the poultry industry has had a significant impact on the broader value chain, with AFMA reporting the addition of over 2000 new jobs in the agricultural sector throughout the poultry value chain.
"Like so many South Africans, the poultry industry has had to contend with load shedding, access to fresh, clean water, the rising cost of fuel, the rising cost of feed and a less than desirable exchange rate; yet, despite these challenges, the industry still produces the cheapest chicken our rands can buy," said Izaak Breitenbach, general manager of Sapa's Broiler Organisation.
"Despite this exceedingly challenging production environment, the biggest threat to South Africa's poultry industry – and by extension, South African consumers – is unfair trade practices from countries like Brazil, Ireland, Spain and Denmark which dump their product on South African shores."
While South Africa's International Trade Administration Commission (ITAC) considers the imposition for five years of anti-dumping duties against these five countries, provisional anti-dumping duties were in force from December 2021 to June 14, 2022.
These temporary duties have expired and have not so far been renewed.
Sapa further stated: "As of June 12, 2022, Minister of Trade and Industry Ebrahim Patel had 60 days to react to the Itac report citing material harm sustained by the local poultry industry due to the unfair trade practices employed by these countries. With neither provisional nor permanent duties in place, the local poultry industry is at risk and the negative impacts can already be measured."
Meanwhile, financial and industrial small and medium market cap companies analyst Anthony Clark told Business Report: "There has also been evidence of other countries suddenly exporting poultry product to South Africa when they have not historically been exporters but in the scheme of things their tonnages are negatable. Brazil and the US remain the dominant forces until the EU is free of avian influenza and imports resume.
"The domestic poultry sector is currently in a delicately balanced position. On one side, declining input costs aiding production margin and an equitable supply/demand mix (versus) load shedding costs, fuel costs and rising imports on the other side.
"It all comes back to the Poultry Master Plan and if Minister Patel holds to his end of the bargain (or) will support for a weakened lower-end consumer outweigh the original November 2019 agreement?"