On 1 August 2022, South Africa’s Minister of Trade, Industry and Competition announced a decision to suspend anti-dumping duties on poultry from Brazil, Denmark, Ireland, Poland, and Spain for a period of 12 months.
This, says the minister, is in light of the rapid rise in food prices and the impact that the imposition of the anti-dumping duties may have on the price of chicken.
According to the USDA, although the Commission investigating dumping found that poultry originating in these countries was dumped into the Southern African Customs Union market and recommended the application of anti-dumping duties, the Minister determined that “the imposition of these duties would have a negative impact on the poor”.
The minister’s stated concern about the rising cost of food mirrors concerns related to the affordability of food felt across South Africa, says the USDA report, adding that various groups have called on the government to take action to reduce the cost of food. For poultry specifically, several organisations have requested the removal of the 15% VAT, a move which would benefit both imported and domestic poultry, it said.
Due to highly pathogenic avian influenza limiting exports from Europe, Brazil is the only trading partner that will immediately benefit from the suspension of anti-dumping duties, said the USDA.
The current anti-dumping duties imposed against US bone-in chicken meat exports to South Africa outside of the Tariff Rate Quota expire on 23 November this year. The commission will consider information submitted by local industry to determine whether there is sufficient evidence to justify the initiation of a further review, or if the duties should expire as scheduled.
Izaak Breitenbach, GM of the South African Poultry Association Broiler Organisation, said that the local poultry industry is surprised by the announcement.
“The local poultry industry is sensitive to the plight of cash-strapped consumers and understands that food price inflation can negatively impact South Africa’s population. However, poultry producers also feel that the minister’s announcement flies against the spirit of the Poultry Sector Masterplan, which specifically listed tariff measures as an important pillar to put a stop to dumping,” said Breitenbach, adding that the latest decision seems to demonstrate that dumping is “okay”.
“Dumping doesn’t help South African consumers or farmers. In fact, dumping can jeopardise food security. A healthy, sustainable poultry industry is what South Africa needs – one that grows, creates jobs, invests locally and pays its taxes on profits generated.”
The decision, he said, will not assist the country’s efforts towards localisation, job creation, transformation plans, investment or development of the rural economy. “In fact, it may actively cause harm and will certainly disrupt industry investment plans for the foreseeable future. The Minister attributes the suspension on the implementation of the anti-dumping duties against the aforementioned countries on rising food costs, and the potential impact on poultry prices. A causal link between trade measures to stem the tide of dumping and rising poultry selling prices must surely be established first?”
Breitenbach also noted that the South African Poultry Association believes that it is a misnomer to think the lack of anti-dumping tariffs will assist the consumer. “The Minister’s announcement merely provides the importers a reprieve for 12 months, and any “cheap” chicken imports simply goes into the pocket of the importer as healthy margins… Once again the importers will capitalise on the opportunity by actively participating in unfair trade practices.”