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Suspension of poultry tariffs a new fox in the coop

The news flustered local poultry producers, but was welcomed by meat importers and exporters.

The news flustered local poultry producers, but was welcomed by meat importers and exporters.

Published Aug 2, 2022

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Stocks of major poultry producers lost wind on the JSE yesterday as Minister in the Department of Trade, Industry and Competition (dtic) Ebrahim Patel suspended punitive import duties for 12 months that had been imposed after an investigation into poultry dumping by Brazil, Denmark, Ireland, Poland and Spain last year.

The news flustered local poultry producers, but was welcomed by meat importers and exporters.

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On the JSE yesterday, Astral Foods in afternoon trade saw shares fell to a low of 3.32 percent, closing 2.39 percent lower at R195.19 while RCL Foods shares ended the day unmoved as the decision gazetted yesterday is still making the rounds of the market.

According to the International Trade Administration’s (Itac) notice in the gazette, the commission had found prima facie evidence of dumping into the Southern African Customs Union (Sacu) market, causing material injury to the Sacu industry.

Itac said it made a recommendation to the minister to impose definitive anti-dumping duties on the subject product originating in or imported from Brazil, Denmark, Ireland, Poland and Spain.

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“The minister approved the commission’s recommendation. However, in making he’s decision, the minister considered the current rapid rise in food prices in the Sacu market and globally and the significant impact this has, especially on the poor, as well as the impact that the imposition of the anti-dumping duties might have on the price of chicken as one of the more affordable protein sources. The minister, therefore, decided to suspend the imposition of the anti-dumping duties for a period of 12 months,” Itac said.

These punitive duties imposed in December for a range of cuts expired in mid-June and ranged between 3 percent to 265 percent.

The SA Meat Importers and Exporters Association (Amie) said the decision was a major win for millions of cash-strapped South African consumers.

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“This is an exceptional outcome for South African consumers, because they are under such significant financial pressure. Chicken is the most affordable, and therefore vital source of protein for South African consumers, especially those living below the poverty line. This shows that the government, and specifically Minister Patel, are alive to the plight of consumers, and ready to take bold actions to help mitigate the impact of rampant inflation, which is encouraging,” said Paul Matthew, chief executive of Amie.

Matthew said governments around the world had been slashing import tariffs as a way to help their citizens survive.

“Mexico, the Philippines and South Korea have removed tariffs on imported goods, including chicken to curb and mitigate the impact of rising inflation on their people. The US is currently considering scrapping its tariffs on various goods for exactly the same reason,” he said.

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However, Fairplay, a South African Poultry Association (Sapa) aligned trade information facilitator, said the minister's decision was of concern and had the potential to impact the development of small black farmers.

“We do not see any benefit of this to the country, we are deeply concerned about the potential effects of the action on the Poultry Master Plan. We will study the potential implications and issue a detailed response,” founder Francois Baird said.

Sapa said it was still to respond to the decision.

Last week, Sapa general manager Izaak Breitenbach pointed out that without these tariffs in place, there could be systematic dismantling of South Africa’s poultry industry, as the country was open to predatory trade from other countries, and the progress that’s been made to achieve the objectives of the Poultry Sector Master Plan were under threat.

“Allowing dumping to continue undermines the pillars of the Poultry Sector Master Plan, and severely compromises and endangers South Africa’s poultry industry – a R56 billion strategic economic asset,” Breitenbach said.

BUSINESS REPORT

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