South Africa has suspended anti-dumping duties on Brazilian exporters of frozen chicken meat, Brazil's economy ministry said on Wednesday, welcoming the decision as a way to boost its competitiveness in the South African market.
South Africa had been applying anti-dumping tariffs on Brazilian exporting companies since December 2021, ranging from 6% to 265.1%, in addition to an import tax, in response to overseas groups allegedly exporting meat below prices in its home market.
The suspension for up to 12 months was taken after several months of negotiations between the Brazilian government and South Africa, the ministry said in a statement.
In 2021, Brazilian exports to South Africa exceeded $1 billion, of which about 17% corresponded to exports of frozen chicken cuts, the ministry said.Brazil is the world's top chicken exporter.
The government’s decision to suspend the tariffs ruffled a few feathers in the industry.
The Food and Allied Workers Union (Fawu) slated the decision by Trade, Industry and Competition Minister Ebrahim Patel to suspend poultry anti-dumping duties for 12 months, saying this would kill jobs and sector.
The department of trade, industry and competition (DTIC) earlier this month granted a reprieve to Brazil, Denmark, Ireland, Poland and Spain by suspending the implementation of anti-dumping duties against them.
It did so to grant relief to South African consumers who are battling with the high cost of living including soaring food prices.
Local poultry producers have threatened to hold back investment in the sector for the duration of the withholding of tariffs.
In a statement, South African Poultry Association (Sapa) General Manager Izaak Breitenbach said the industry felt betrayed by Patel for the decision which went against the spirit of the poultry Masterplan to limit imports and allow for the growth of the local industry.
“Consumers will obviously buy cheaper chicken portions because local consumers are price sensitive and it is not the fault of consumers to be price sensitive, more so that the salary scale of workers in South Africa is low, but it is the fault of practices of unfair trade where chickens are dumped in the country, ” Fawu said.
It added that there would then be less chicken sold from local supply, leading to workers being retrenched in a sector that had already lost more than 2 000 jobs from previous chicken dumping.
“There will then be closure of small-scale farms and small business that supply farms as they cannot continue participating in the value chain. It is even worse for the informal economy as most poor communities survive through selling chickens on the streets,” Fawu said.
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