SA suspends anti-dumping duties on poultry imports

Allows for a year of hopefully cheaper chicken, in an effort to assist cash-strapped consumers.
The move may help keep an important source of protein on more tables, but could also cost local jobs. Image: Dean Hutton/Bloomberg

South Africa is set to suspend the imposition of anti-dumping duties on chicken imports from Brazil and four European Union countries – Denmark, Ireland, Poland and Spain – for at least a year, in order to protect consumers’ pockets amid high food prices.

The SA Meat Importers and Exporters Association (AMIE) has applauded the move, saying it means many consumers living below the poverty line will be better able to afford an important source of protein.

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Perspective

The suspension follows a 2021 investigation by the International Trade Administration Commission (Itac) into anti-dumping duties against the five countries, in which it determined that chicken was sold in SA at extremely low prices, causing “material injury” to the local poultry industry.

Prior to the completion of the Itac investigation, the government had imposed provisional anti-dumping duties from December 2021 until June, to combat what the SA Poultry Association described as predatory and unfair trade.

The association warned of massive job losses, record high food prices and threatened food security without the implementation of the provisional duties.

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Minister of Trade and Industry Ebrahim Patel said that in making his decision, he considered the current rapid rise in food prices in the local market and globally, and the significant impact this has on the poor. This is according to a Government Gazette notice published on Monday (1 August).

Food prices have been affected by inflationary pressures and high oil prices triggered by the Russian invasion of Ukraine.

The suspension of additional tariffs on chicken imported from the five countries is a first step in the right direction, says SA AMIE CEO Paul Matthew. The association says it lodged an application for government to consider a moratorium on tariffs on imported chicken to help curb inflation in April. It also asked for existing tariffs to be reconsidered and for all chicken cuts to be exempted from value-added tax.

“Governments around the world have 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,” Matthew says.

“The liberalisation of trade policies can help consumers.

“The opposite is true of localisation and protectionist policies because they restrict competition, which lead[s] to an increase in the price of local goods.”

Palesa Mofokeng is a Moneyweb intern.

Listen: SA Association of Meat Importers and Exporters CEO Paul Matthew on the impact of the imported chicken tariff suspension (read transcript)

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It is this very mechanism that is supposed to provide “cheaper food for citizens” that destroyed the agricultural industry across Africa.

When we are able to import everything below the local cost of production, who will buy it, and with what money? We can even import government employees at half the price from Zimbabwe or DRC, but we have “anti-dumping” laws that prevent cheaper imported labor for the benefit of taxpayers. The state itself is a monopoly that does not allow foreign competition. This highly inefficient and uncompetitive organization wants everyone else to compete in an unfair environment while they are also expected to create jobs, pay a minimum wage, and pay taxes.

The business that pays the taxes that pays the salary of the government employee that wants the cheap chicken, will be bankrupted by the cheap imports. In which universe does this make sense?

While one government department spends billions on the “transformation” of the poultry-farming industry, another department bankrupts those “transformed” farmers by allowing the dumping of chicken products in the local market.

Seen from an overriding national perspective, the money that was spent on the transformation of the local agricultural sector eventually benefitted European and Brazillian poultry farmers. The ANC “empowered” European farmers to the detriment of local farmers.

This is a schizophrenic government.

End of comments.

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