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China's Ministry Explains New Tariff for US Chicken

30 April 2010

CHINA - The Ministry of Commerce alleges that American poultry firms benefit from government subsidies, and that it will levy anti-subsidy duties of up to 31.4 per cent on some US chicken products that have received US government subsidies.

This is the first time that China has imposed duties on imports of agricultural goods on the grounds of alleged subsidies, according to official sources in China.

The Ministry of Commerce said the duties were necessary to create a level playing field for Chinese companies.

In a statement, the ministry said: "The US government has provided subsidies to poultry farmers for forage crops like maize and soybeans which are used as feed for broiler chickens, which is raised specifically for meat production. This has not only given the US companies an unfair advantage in the Chinese market, but also hurt the interests of domestic companies."

Chinese companies have seen prices decline over the past two years, as the imported US chicken products are priced much cheaper, said Zhang Hengtao, vice-president of Beijing-based Huadu Group, a major chicken products supplier.

The average price of poultry products during the first quarter of this year declined by 10 to 20 per cent, compared with the same period last year, Mr Zhang said.

"The American products are cheaper because of the various agriculture subsidy policies. Prices of their forage crops for chicken are about 20 per cent cheaper than those in China," he added.

According to the ministry, the US chicken exporters who had submitted information to the government investigation would face duties ranging from 3.8 to 11.2 per cent, while the remaining companies would be subjected to higher tariffs.

Chinese companies buying broiler chicken products from the US will need to pay a deposit to the Customs authorities in line with the duty from Friday, the ministry said.

"The move intends to create a fair competition environment for domestic poultry companies, whose profit margins had been hit," said Ma Chuang, deputy secretary-general of the China Animal Agriculture Association.

China's imports of chicken products from the US increased by 6.8 per cent to 620,000 tons in 2009, while the nation's total chicken product imports declined by 7.5 per cent to 730,000 tons over the same period, according to the association.

Meanwhile, hundreds of batches of imported chicken products from the United States were found to be unqualified due to safety risks in the investigation, either violating the guarantee time or having higher bacterial pathogens, Ma said.

"We also hope the US companies will bring safer products to China," Ma said.

The new tariffs come on top of a February move to impose anti-dumping duties of 105.4 per cent on imported US chicken products.

Further Reading

- Go to our previous news item on this story by clicking here.

ThePoultrySite News Desk



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