SOUTH AFRICA – South Africa Poultry Association (SAPA) has proposed a hike in import tariffs of frozen chicken portions to 82% saying that cheap imports from Brazil are hurting the competitiveness of the local industry.
According to the association, the hefty increase in tariffs, for bone-in and boneless portions, will shield the local industry from dumped portions and save thousands of jobs.
Izaak Breitenbach from SA Poultry Association (SAPA) says that the poultry industry has employed about 100,000 people directly and indirectly adding that increase imports will only mean loss of jobs.
Chair of RCL Foods, Jannie Durand also said that unmitigated import of commodities have destabilised the local poultry and sugar industries.
According to a report by SAPA, total poultry imports between January and October 2018 amounted to 483,900 tons while in 2017 the imports were valued at US$ 460 million.
Breitenbach, now the head of the SAPA Broiler Organisation following the departure of Kevin Lovell, said increasing the import tariffs should be prioritised to minimise further harm to the local industry.
“The biggest challenge facing the broiler industry at the end of 2018 is the impact that dumping has had and continues to have.
Producers in Brazil, for instance, have financial incentives to export and there is great concern over the traceability of certain imports that are repackaged in SA, since some importers flout the legal requirements,” Breitenbach said.
He said the current tariffs of 12% for boneless portions and 37% for bone-in cuts has not been a sufficient mitigation measure of controlling cheap imports.
Breitenbach defended the South African broiler industry saying its negative perceptions were unfounded.
“This is an industry that is immensely competitive internationally in terms of those elements of the value chain that it can manage or influence directly.
Chicken prices are established by the price of individual portions, but due to phytosanitary restrictions preventing South African producers from exporting, they are unable to participate in the lucrative EU and US market for white breast meat, which would in turn allow them to subsidise their own [so-called] brown meat, as happens in other countries,” he said.
According to the lobby group’s head SA’s semi-arid climate has put pressure on local producers’ competitiveness because increasing the cost of feed and grain which has necessitated the rather expensive grain imports.
Countries such as Mexico, Japan and Korea had set tariffs of between 109% and 193% for Brazilian poultry imports.