Poultry Producers Seek Protection from EU Dumping

SOUTH AFRICA - The poultry industry is asking the government to impose an anti-dumping duty of 91 per cent on Germany and the Netherlands, along with a similar duty of 58 per cent on the UK, as part of attempts to halt the dumping of frozen bone-in chicken portions in countries belonging to the Southern African Customs Union.
calendar icon 4 November 2013
clock icon 3 minute read

BusinessDay reports that South Africa does not impose duties on members of the European Union (EU) because of a trade and co-operation agreement signed in 2001.

The push by the South African Poultry Association for anti-dumping duties on the three European countries comes after the September increase in import tariffs on five categories of imported chicken products, aimed mainly at imports from Brazil.

Following this tariff increase, announced by Trade and Industry Minister Rob Davies last month, importers from South Africa and exporters from Brazil and Argentina had predicted a shift towards EU chicken products.

Trade, competition and applied economics firm Econex said in its October research note that chicken imports from Germany had grown 487 per cent from 2008 until last year. Imports from the Netherlands had risen 397 per cent and those from the UK had risen 401 per cent in the same period.

Econex said of the five categories on which tariffs were increased, bone-in cuts constitutes the largest imported category, with the Netherlands being the largest exporter to South Africa in this category.

The International Trade Administration Commission announced last week that it would be investigating anti-dumping claims against the three trading partners since the South African Poultry Association presented it with information that indicates a prima facie case of harm to the local industry.

If the poultry industry succeeds with its application, this would go a long way in sealing the local market to chicken imports, XA International Trade Advisors director Donald MacKay said this week.

Econex said in its research note that the average annual increase in the production and consumption of chicken in South Africa was 6.2 per cent and 7.1 per cent, respectively, from 2001 to 2010.

Prior to the latest tariff increase, growth forecasts for the chicken industry from last year to 2021 had indicated an annual average production increase of 2.8 per cent and a consumption increase of 4.5 per cent.

Econex described the imposition of higher tariffs as "protectionist policies", saying the costs to consumers were large and fell disproportionately on the poor.

The company’s research showed that the poorest 10 per cent of South Africans spend 15 per cent of their household income on chicken.

"A striking feature of the protectionist attitude adopted through the increase in tariffs is that it fails to address any of the debilitating characteristics (high raw material, high logistics costs, low labour productivity and high electricity cost) within the industry," the Econex note read.

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