Johannesburg - An immient decision from the International Trade Administration Commission (Itac) on whether or not poultry import tariffs would be levied on EU members – Germany, Netherlands and the UK – would turn the local industry on its head, to the benefit of producers.
The chief executive of the SA Poultry Association (Sapa), Kevin Lovell, told Business Report that Itac’s decision on an import duty could have an impact on about 10 percent of total chicken consumed in South Africa.
“At this stage we are not sure of what level of protection we are going to get, but we understand [it] would mean that we are not going to be losing market share because of unfair marketing,” he said.
The Itac decision is expected in the next week or two. It is hoped it will settle strained relations between local producers and importers, as well as calm producers anxious about spiralling input costs.
“We will celebrate the fact that we are starting to see the beginning of fair poultry competition in this country.”
Lovell added that while local producers waited for a decision from Itac, Sapa had asked for an anti-dumping duty of 91 percent on imports from Germany and Netherlands and a duty of 58 percent on British chicken.
Total poultry imports of 390 542 tons last year were 3 percent lower than in 2012, but they were still 12 percent higher than in 2011, according to the Broiler Organisation Committee’s 2013 report.
While the industry noted a decline of 3 percent in annual poultry imports, there was also a rise of imports from the EU.
The report found that if EU member countries were taken as a unit, then 42 percent of total chicken imports came from the union last year. A total of 148 104 tons of frozen broiler meat was imported last year; in comparison, in 2009 only 4 100 tons of frozen broiler imports came from the EU.
Netherlands was the biggest contributor of frozen broiler imports at 45 percent, followed by the UK at 26 percent, Germany at 15 percent and Denmark at 5 percent.
David Wolpert, the chief executive of the Association of Meat Importers and Exporters, said South Africa imported about 210 000 tons of chicken annually, of which 70 percent came from the EU. He said that the association would wait for Itac’s determination before assessing its impact.
Lovell said South Africa was the single biggest market for poultry exports from Europe.
“We have a very balanced market in South Africa because we eat the whole chicken, unlike in Europe where chicken [is] a fashionable food item, with only certain parts, such as breast, consumed.”
Although listed chicken producers such as Astral Foods and Sovereign Foods reported slight improvements in their latest financial results, they raised concerns about the amount of chicken imports from the EU.
Astral’s chief executive, Chris Schutte, said that should the association’s application for anti-dumping duties against the EU be successful, “we believe this will go some way to improving imbalance in the supply and demand for chicken”.
In its year-end results, Sovereign Foods said that although import levels were slightly below those of the prior year, “it appears that importers changed the origin of their imports from countries outside the EU to EU countries to circumvent the revised tariffs”.
It said that imports continued to represent a significant portion of about 20 percent of local production.
Lovell said the move by Itac vindicated the industry because it showed that the commission agreed with it that the dumping that was taking place was actually causing harm. - Business Report