Astral crows for further action on poultry imports

Astral Foods Limited Interim Results for the six months ended 31 March 2012. photo: supplied

Bloomberg

Poultry imports to South Africa were making it difficult for local producers to recover costs and might result in job cuts, Chris Schutte, the chief executive of JSE-listed Astral Foods, said on Monday.

“The imports are really hampering our ability to recover our input costs,” he said on Monday. ‘‘The liberal attitude toward imports from other countries into South Africa is really playing havoc with the poultry industry. It hinders investment and job creation and will cost jobs.”

Astral, which employs more than 12 000 full-time and contract employees, was “in the process of evaluating how to soften the blow and has started the process with staff and labour unions”, he said in an e-mailed response to questions.

In February the International Trade Administration Commission of SA (Itac) imposed additional import tariffs of as much as 63 percent on shipments of some cuts of chicken from Brazil until August 10, after initial information showed producers there were dumping products in South Africa and neighbouring nations.

Schutte said the local price of yellow maize had surged 67 percent in the past three years while chicken prices were the same as four years ago, and poultry imports had increased to record levels.

South Africa’s unemployment rate rose to 25.2 percent in the first quarter.

The SA Poultry Association, whose members include Astral and Rainbow Chicken, the nation’s largest producer, asked Itac to investigate alleged dumping of Brazilian poultry products last year.

Brazil filed a dispute against South Africa with the World Trade Organisation (WTO) over the taxes on June 21, seeking consultations under the dispute settlement system.

Poultry imports rose to a record 39 461 tons in April, Astral said in a presentation published on its website on Monday, citing figures from the SA Poultry Association.

The association said that 73 percent of all imports came from Brazil in 2010.

‘‘Brazil is within its own right to approach the WTO,” Thembinkosi Gamlashe, a spokesman for Itac, said. “The investigation has now been finalised by Itac and the final report will be presented to the minister of trade and industry in due course.”

Trade and Industry Minister Rob Davies said on April 11 that the country did not believe that Brazil would approach the WTO as there was “no big crisis” with Brazil on poultry.

Astral lost 0.65 percent to close at R117.25 yesterday. The poultry producer has fallen 7 percent this year.