SOUTH AFRICA - Consumers could face further increases in chicken prices in the next two months, which is when the government is expected to take a decision on anti-dumping duties on frozen bone-in chicken portions from certain European countries.
According to BusinessDay, import duties on various chicken products were increased in September last year in an attempt to halt cheap imports from Brazil, in particular, which local producers said were causing financial and job losses.
The higher duties have contributed to retail prices of 2kg bags of individually quick-frozen chicken portions, excluding promotional items, rising by between 15 per cent and 30 per cent in the past six months, according to David Wolpert, CEO of the Association of Meat Importers and Exporters.
Frozen chicken represents more than 70 per cent of South Africa’s poultry production and sales.
Duties on bone-in chicken portions were increased from a specific duty of 220c/kg (roughly 17 per cent) to an ad valorem duty of 37 per cent. An analysis of import data indicates that imports from Brazil declined significantly between October last year and January, whereas imports from some European markets, which are not subject to import duties, have increased.
Total imports of bone-in chicken portions in the 12 months to the end of January have declined 10.42 per cent compared with the same period ending January 2013, according to detailed Association of Meat Importers and Exporters statistics.
The decline is attributed to higher tariffs and a weaker currency. "The higher duties, however, affected only non-European Union (EU) imports and EU imports are still running at relatively brisk volumes," said Mr Wolpert.
This may end if the South African Poultry Association is successful in its application to have anti-dumping duties imposed on frozen bone-in chicken portions from Germany, the UK and the Netherlands.
The International Trade Administration Commission is wrapping up its investigation into the alleged dumping. A preliminary decision was expected within two months, said its spokesman, Thembinkosi Gamlashe.
The poultry association has asked for duties of 91 per cent to be imposed on frozen bone-in chicken from Germany and the Netherlands and 58 per cent on the same product from the UK.
Kevin Lovell, the poultry association’s CEO, said it wanted an anti-dumping tariff to be imposed to correct unfair trade action, not to punish importers. "The possible effect on retail prices is difficult to model until we know the quantum and how it changes import volumes and pricing. Our primary concern has always been to have fair trade.
"Our second concern is to have stable trade, meaning that we would want the importers to have to compete with us on the same terms as we do and not simply use their access to non-market prices to sell their product with ease.
"This will hopefully result in more stable levels of imports with less monthly volatility, which wreaks havoc with the local industry as our production cycle involves long-term planning," said Mr Lovell.
International Trade Advisors, acting on behalf of the Association of Meat Importers and Exporters, has highlighted several alleged flaws in the International Trade Administration Commission’s investigation, raising the possibility of a trade dispute with the EU.
Flaws pointed out included the prices used for comparison in certain cases such as for fresh rather than frozen chicken, ignoring the high levels of brining in local chicken and comparing retail prices in Europe with bulk export prices.
South Africa had to withdraw preliminary anti-dumping duties on Brazilian chicken early in 2013 after flaws in its investigation led to a complaint from Brazil to the World Trade Organisation. According to its rules, anti-dumping duties can be imposed only when dumping is proved, material injury has occurred in the local market and there is a causal link between dumping and material injury.
TheMeatSite News Desk