Durban - There has been mixed reaction to Trade, Industry and Competition Minister Ebrahim Patel’s notice to impose definitive anti-dumping duties on imported chicken.
The duties – approved by the minister in 2022 after a recommendation by the International Trade Administration Commission (ITAC) – had been suspended for 12 months but are now set to come into operation.
While the move has been welcomed by the SA Poultry Association, the DA has raised concern about rising chicken prices.
The notice published in the Government Gazette on August 2 said the International Trade Administration Commission of South Africa initiated an anti-dumping investigation on frozen bone-in portions of fowl of the species originating in or imported from Brazil, Denmark, Ireland, Poland and Spain in 2021.
“After considering comments, the commission made a final determination that the product originating in or imported from the subject countries was being dumped into the Southern African Customs Union (Sacu) market causing material injury to the Sacu industry.
“The commission, therefore, made a recommendation to the Minister of Trade, Industry and Competition to impose definitive anti-dumping duties on the subject product originating in or imported from Brazil, Denmark, Ireland, Poland and Spain.”
The notice added that the minister approved the commission’s recommendation.
“However, in making its decision, the minister considered the rapid rise in food prices in the South African market and globally at the time and the significant impact this had, especially on the poor, as well as the impact that the imposition of the anti-dumping duties might have on the price of chicken.
“The minister, therefore, decided to suspend the imposition of the anti-dumping duties for a period of twelve (12) months or a shorter period of time depending on the prevailing circumstances at the time.”
The notice said the 12-month period had now ended.
“The minister is of the view that the anti-dumping duties should now become effective. The minister has therefore requested the Minister of Finance in terms of section 56 of the Customs and Excise Act, 1964, to give effect to the anti-dumping duties through amendment of the Customs and Excise Act by Sars.”
Professor Bonke Dumisa, an independent economic analyst, said dumping of products refers to products being sold to another country, in this case South Africa, at a price lower than what the country is selling the product for.
“Many countries do this so that they can do business with other countries. If we take an example, chicken imported from Brazil is selling at lower prices in South Africa than chicken produced locally.”
Dumisa added that by imposing the anti-dumping duties there will be an increase in the price of chicken but not major.
“There will be an increase in chicken but at the same time it also encourages local businesses to produce more chicken locally. ”
Izaak Breitenbach, the CEO of the SA Poultry Association (Sapa), said that the lapsing of the duties last year caused material harm to the local industry and imports surged from 17 000 tons per annum in October 2022 to 46 000 tons in February 2023.
“Over and above this the industry had high raw material costs to contend with, as well as load shedding. This duty will impact dumped imports that hurt the industry in the past and will put the industry in a better position to grow, facilitating economic growth not only in poultry but the total grain value chain. It will also assist greatly with job creation.”
Breitenbach added that importers in the past did not give the benefit of dumped chicken through to the consumer and thus no benefit was taken away by the duty.
“Sapa got a study done by Genesis Analytics to determine what the impact of this duty would be on consumer pricing and they found that the duty will only have a marginal effect on price, but the raw materials (feed) and load shedding would be the major cost drivers for consumers to be concerned about.”
Dean Macpherson, DA spokesperson on Trade and Industry, said the party had noted the notice decision.
“We want to be clear: this is a terrible decision. These tariffs, endorsed by the International Trade Administration Commission and the minister, will bring an avalanche of cost increases on an essential food item for millions of South Africans.”