Astronomical chicken import tariff hits back South Africa’s poultry industry
SOUTH AFRICA – South Africa’s poultry punitive trade tariffs on imported chicken have been reimplemented after a 12-month reprieve.
These long-feared, anti-competitive duties were initially suspended in July last year over concerns regarding the impact of these duties on soaring food prices.
But now, the duties on imports from some of the country’s most important poultry trading partners will once again hit local pockets at a time when many South Africans are already buckling under severe financial stress.
The result will be an anti-dumping duty of a maximum of 265% placed on chicken imports from Brazil in addition to the 62% tariff that is already in place, which is responsible for more than half of the country’s imported frozen chicken.
The new duties also include an additional tariff of a maximum of 158.4% on imports from Ireland; 96.9% on Poland; 85.8% on Spain; and 67.4% on Denmark.
In a statement, the general manager of the South African Poultry Association, Izaak Breitenbach claimed that the landed cost of imported chicken from Brazil is around R9 per kilogram.
“By comparison, the local producer price is closer to R30.50, which would mean that imports are more than three times cheaper,” he stated.
However, this estimation fails to consider that mechanically deboned meat (MDM), chicken and offal cannot and should not be factored into this calculation.
He added that South African poultry producers do not manufacture mechanically deboned meat, which is often significantly less expensive than bone-in meat despite the higher input costs. As a result, the inclusion of MDM unfairly distorts the calculation.
Additionally, imported chicken leg quarters, an extremely popular cut in South Africa, are already landing at a cost of over R35 per kilogram, including duties.
By contrast, locally-produced individual quick frozen (IQF) chicken is being sold to local wholesalers at approximately R25 per kilogram. In other words, local producers have a clear advantage against international competitors.
Understandably, South Africa’s local poultry producers have however expressed their concern about the impact of dumping practices on their ability to compete in the local market, which is why the duties were implemented.
But the problem is far more nuanced and unfortunately, in the current circumstances, these duties are likely to do far more harm than good.
Reciprocal trade benefits all market participants, from producers and sellers to consumers and even the government, which benefits from increased tax revenue due to enhanced supply.
South Africa cannot expect to export with low or no duties while imposing absurd duties on import partners.
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