Anti-dumping duties on frozen chicken up for review

 

The freeze on duties against Brazil and four European countries ends this month.

Local chicken producers and importers of frozen bone-in chicken portions are gearing up for the upcoming review to reimpose anti-dumping duties against several key trade partners.

 

 

The Association of Meat Importers and Exporters (Amie) published a lengthy report arguing that the duties will have a detrimental impact on consumers and food security.

The South African Poultry Association (Sapa) prepared an equally lengthy report warning against “superficial and overstated” assumptions about chicken price increases due to import duties without a proper analysis of all the factors.

The suspension

The International Trade Administration Commission (Itac) introduced provisional duties against Brazil, Denmark, Ireland, Poland and Spain for six months from January to June last year.

Following input from the affected countries, Itac recommended the imposition of final anti-dumping duties for a period of five years against these countries. Minister of Trade, Industry and Competition Ebrahim Patel agreed that the countries were in fact dumping their produce in the South African Customs Union (Sacu) market, causing material harm to the local industry.

However, Patel suspended the imposition of the duties for 12 months until August this year. His reason: the impact of high food inflation on struggling South Africans.

In its report for Amie, Tutwa Consulting highlights the high unemployment rate, the level of poultry consumption compared to other meat products, and the impact of elevated prices on a shift away from poultry to other sources, potentially non-meat sources .

“To safeguard the domestic industry from implosion, government intervention is required. While there are a myriad of constraints facing the domestic industry … the imposition of anti-dumping duties is one which is in government’s control,” the report says.

“It is therefore recommended that government take action to allow ease of access for chicken meat imports, as this will prevent the collapse of the domestic industry, enhance competition within the domestic market, and ensure that consumers have access to this essential dietary component.”

 

Tutwa Consulting says in its report that in December 2021 (before the imposition of the provisional duties), the average price per kilogram of chicken products subjected to duties was R18.41. By August 2022 (when these duties were suspended), the price had risen to R22.65.

Consider several factors

Genesis Analytics, at the request of Webber Wentzel on behalf of Sapa, investigated the likely impact of the duties (and their suspension) on the retail price of frozen bone-in chicken portions in South Africa.

It argues that there are several factors that must be considered when determining the extent to which a tariff change can be passed on to consumers.

It notes that when the provisional duties were in place, imports from European countries declined effectively to zero because of the bird flu import bans from the European Union. “This in and of itself would have significantly diluted the pass-through of the provisional anti-dumping duties onto average import prices,” states the report.

“This suggests one should be very cautious about drawing any strong conclusions about the detrimental effects of these anti-dumping duties on consumers to date as, by [and] large, only one of the five targeted countries (Brazil) has been trading since the provisional anti-dumping duties were implemented (and since the final anti-dumping duties were suspended).”

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Source  – Moneyweb