Sapa applies for anti-dumping duties on ‘unfair’ chicken imports from 5 countries
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DURBAN - THE SA POULTRY Association (Sapa) has applied for anti-dumping duties on imported chicken from five countries including Brazil and four European Union nations – Denmark, Ireland, Poland and Spain.
Sapa's broiler organisation's general manager, Izaak Breitenbach, said the organisation had proof that these countries had been dumping frozen chicken portions into the South African market, which brought unfair competition for local producers and cost jobs in the local industry.
“They are bringing frozen chicken portions into South Africa, often at prices lower than their production costs, and/or lower than they are selling the same product in their home markets. This not only constitutes dumping under World Trade Organisation and South African rules, it is unfair because it creates jobs in producer countries while stifling economic growth here,” said Breitenbach.
Statistics showed that South African chicken imports had grown by 400 percent in the past two decades, he said.
Breitenbach said that benchmarking this with other countries, South Africa's current imports were at 30 percent while those of the countries like the US and Brazil were around just 1 percent. South Africa was the US and Brazil's fifth largest importer.
According to Sapa, R6.1 billion left the country in chicken imports costing 15 000 local jobs. The industry said that this was not in the best interests of the South African poultry industry.
Sapa chairperson Aziz Sulliman said the imports were not only affecting larger poultry businesses, but also the small-scale black producers, who employed about 110 000 people directly and indirectly.
“The remedy is the anti-dumping duty because if the government does not protect us, we cannot grow. We also cannot transform a shrinking industry.”
Sulliman said they needed protection from dumping, undeclared imports, as well as those imports that circumvented tariffs illegally.
The application sought anti-dumping duties based on the difference between what frozen chicken portions were sold for in the producer country, and the lower export price of frozen chicken portions to South Africa, with dumping margins up to 201 percent.
The application has been submitted to South Africa's International Trade Administration Commission (Itac) which will investigate the complaint before making a recommendation to the Minister of Trade, Industry and Competition. The process is expected to take about 12-18 months.
Sapa said the application was supported by a number of organisations and entities, from grain producers, smallholder farmers and contract growers to the majority union in the chicken industry, and companies dependent on the poultry value chain, such as, equipment suppliers and feed suppliers.
“The situation has become more precarious since Covid-19 disrupted retail globally, so that chicken-producing countries all sit with overflowing cold-storage facilities and are looking around for markets to target with this surplus. We are expecting a renewed onslaught and it is crucial for us to be vigilant and use the trade remedies that are available to us,” said Breitenbach.