According to The Citizen, Chicken prices in South Africa could soar if punitive tariffs are implemented again in August, following a 12-month halt.
Following a year-long reprieve, trade tariffs on imported chicken are expected to be implemented in August, and consumers will feel the pinch the most.
This comes after the International Trade Administration Commission’s (ITAC) investigation concluded that producers in Brazil, Denmark, Ireland, Poland, and Spain have been dumping poultry products in South Africa, causing material harm to the local poultry industry.
The landed cost of imported chicken from Brazil costs around R9.00 per kilogram, while locally grown chicken sells for nearly R30.50 – three times more expensive than imported chicken.
Despite recognising the need for chicken tariff duties to address the negative impact of dumping on the ability of local producers to compete in the market, experts fear that these duties will do more harm than good.
“We’re going to see significant shortages on shelves. We’re going to see price increases that are going to affect the consumer, there’s no doubt about that. We’re not taking a combative stance against that industry. I believe that they’re facing significant challenges of their own,”
Fred Hume, Managing director of South African food distributor Hume International, told News24.
According to industry representatives, South Africa's poultry industry has been hit hard by the country's energy crisis and blackouts, rising fuel and feed costs, and exchange rates.
The South African Competition Commission in its March 2023 Essential Food Price Monitoring Report noted that the South African poultry industry is highly concentrated, dominated by vertically integrated firms, with the top 2 producers making up 50% of the market.
The report notes that such a market structure raises concerns that these firms could “use their market power to achieve anti-competitive prices”.
Previously, provisional anti-dumping duties were imposed on the five countries from December 2021 to June 2022. However, in August last year, the South African authorities decided not to extend the duties to avoid further increases in food prices.
The Citizen cites some of the gazetted anti-dumping tariffs on chicken imports from some countries accused of dumping:
- Brazil – 265% in addition to the 62% tariff already in place.
- Ireland – 158.4% additional tariff.
- Poland – 96.9%
- Spain – 85.5%
- Denmark – 67.4%
Experts fear that by imposing such high duties on imports partners, South Africa cannot expect to export with low or no duties.
“Reciprocal trade benefits all market participants, from producers and sellers to consumers and even the government, which benefits from increased tax revenue due to enhanced supply,” said Hume,“
stressed Fred Hume.
At the same time, the South African Poultry Association (SAPA) is advocating for the imposition of anti-dumping duties, warning of the serious impact on local jobs and ultimately food security and pricing in the region if South African chicken producers are not protected from unfair imports.
Sources: The Citizen, News24
