September 2, 2022


South Africa poultry sector expects to see increase in dumped imported chicken



The South African poultry industry anticipates an increase in dumping of imported chicken in the coming months, especially from Brazil, after receiving a "licence" from the country's Minister of Trade, Industry, and Competition Ebrahim Patel, Moneyweb reported.


According to a FairPlay Movement report, Rainbow Chicken (owned by RCL Foods, which is listed on the Johannesburg Stock Exchange), has demanded that anti-dumping duties be placed on bone-in chicken portions coming from Brazil, Denmark, Ireland, Poland, and Spain.


The South African Poultry Association (Sapa) claims they have come to terms with Patel's decision to suspend anti-dumping duties for a year, but they still believe it will be detrimental to the sector.


At the end of the previous year, the International Trade Administration Commission (Itac) discovered dumping evidence and enacted provisional anti-dumping duties for a period of six months.


Following submissions and feedback from a number of importers from the affected countries as well as local stakeholders, it was advised that the duties be implemented for at least five years.


Patel delayed the implementation of the tariffs by a year after taking into account the "current rapid rise" in food prices both locally and globally as well as the potential effects of the anti-dumping duty on the price of chicken.


Izaak Breytenbach, CEO of Sapa, said that the minister erroneously believed that the tariff increase would result in higher prices.


Breytenbach said they have always maintained that raising tariffs has never raised prices for consumers, the main justification is that consumers never profit from price reductions. Prices for imports are either market rates or slightly less than those for comparable local goods.


He said the importer keeps the difference from the sale of these imported goods in South Africa at market rates.


Making it less profitable and thus less alluring to dump goods in another country is the goal of anti-dumping tariffs.


Sapa has hired a team of economists to conduct a study on the effects of tariff increases on consumer prices. When it's time for the minister to reconsider implementing the tariffs, he should be armed with the study's findings so that he can make an informed choice rather than one based solely on rumours.


When the South African Revenue Service publishes the most recent import statistics in about three months, Breytenbach says Sapa anticipates seeing the magnitude of the increase.


However, he still finds it "surprising and disappointing" that the minister chose not to protect the local industry despite admitting that the dumping of bone-in chicken portions is causing producers "material harm." He claims that the industry will not pursue legal action as a result of the suspension of the tariffs.


It costs 265% less to import chicken from some Brazilian producers into South Africa than it does to sell it there.


Itac has suggested imposing anti-dumping duties ranging from 6% to 50% on specific Brazilian producers like Seara and Copacol and 265% on all other imports from that country.


Irish producers have a dumping margin of 158%, most Polish producers are subject to anti-dumping duties of nearly 97%, and Danish producers sell bone-in chicken to South Africa at a price that is 67.4% less than what Danes pay for it. Anti-dumping duties of 85.8% are imposed on Spanish producers.


2020 saw the implementation by South Africa of a most-favorable-nation tariff of 42% for boneless portions and 62% for portions with bones on all importers, excluding those from the European Union. Breytenbach claims that past mistakes have taught them that these tariffs don't provide enough defence against dumping.


-      Moneyweb

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