SOUTH AFRICA – South African Revenue Service has published notifications that seek to impose a 35.3% safeguard duty on EU bone-in chicken imports with immediate effect, something that is likely to affect the competitiveness of the commodity in the South African market.
A GAIN report by USDA suggests that the European Union, which was the largest exporter of bone-in chicken meat to South Africa in 2016, lost substantial market share due to the provisional safeguard duty and the avian influenza outbreaks in 2017.
A safeguard investigation by the International Trade Administration Commission of South Africa (ITAC) highlighted that the commission had been instructed by the Minister of Economic Development to investigate and evaluate imposition of safeguard measures on EU bone-in chicken.
The application, made by the South African Poultry Association (SAPA) indicated that the EU bone-in chicken imports threatened to cause a serious disturbance in the South African market.
2016 provisional ban
In regard to SAPA’s arguments, South Africa announced a provisional safeguard duty of 13.9% on bone-in chicken from the EU, which expired 3 July 2017.
Chicken imports have been linked to job losses in South Africa, one of the challenges highlighted in relation to the chicken industry.
While EU, United States and Brazil have been the main suppliers of chicken to SA, the country lacks a well-developed chicken export strategy, thus most of it end in the local market.
South Africa also imposed anti-dumping duties ranging from 3.86 to 73.3% on chicken from Germany, the Netherlands and the UK.
In 2016, the major EU countries that exported bone-in chicken to South Africa were the Netherlands, the United Kingdom (UK) and Spain, with a combined market share of 60%.
Arguably, SAPA has referred to imported bone-in chicken as waste due to production and consumption parity.
Department of Trade and Industry (DTI) has reportedly negotiated the opening of certain Middle Eastern markets as well as the USA.
Poultry production in South Africa has been on the decline as a result of drought which pushed up the price of feed, the most essential element in raising chicken.
According to the revenue authority, the safeguard duty will decrease over 4 years, falling to 15% from March 12, 2021 to March 11, 2022.
As a retaliatory measure, the Association of Poultry Processors and Poultry Trade has requested the European Commission to impose reciprocal measures on South Africa.