The poultry industry is recovering after a South African Bird Flu outbreak in 2023 led to billions of rand in losses in the sector with Sapa estimating that 7.5 million birds were culled. Photo: Supplied
Imposing anti-dumping duties on chicken products has helped the local industry to recover, the South African Poultry Association (Sapa) said.
This follows Business Report reporting on Monday that frozen food importer Hume International said lobbyists calling for a harsher anti-dumping duties stance were short-sighted and could potentially harm broader economic interests. An expert has said that anti- dumping duties can cause the price of poultry to significantly rise.
Izaak Breitenbach, the head of the Sapa, said dumping, according to the World Trade Organisation (WTO), is unfair trade where a country exports their problem (oversupply) to become the problem of the importing country.
“This is not allowed in terms of world trade, and the remedy is an anti-dumping duty. South Africa was the dumping ground for nine countries in terms of poultry, and we have remedied the situation by getting anti-dumping duties against these countries.”
Breitenbach added that this has allowed the local industry to recover and improve efficiencies and to supply chicken at really low prices to consumers. “We as the poultry industry don’t lobby for harsher duties; we only lobby for a stop to the practice of dumping.”
The poultry industry is recovering after a South African Bird Flu outbreak in 2023 led to billions of rand in losses in the sector with Sapa estimating that 7.5 million birds were culled.
Breitenbach said Sapa doesn’t anticipate applying for any further duties.
Professor Lawrence Edwards from the School of Economics at the University of Cape Town said it is important to differentiate between general tariff changes and anti-dumping (AD) duties. “General tariffs are applied on a most favoured nation (MFN) basis and apply equally to all countries that are not part of preferential trade agreements (e.g. SA is part of a free trade agreement with the EU, and tariffs on poultry are set to zero).”
Edwards added that anti-dumping duties are used for very specific reasons, and their use is regulated as part of a country's participation in the multilateral trade agreements of the WTO. “They can only be used if: (a) there is evidence that foreign exporters are pricing below normal prices (e.g. they sell to SA at a price below the price they sell elsewhere, including in their domestic market) – called ‘dumping’, and (b) there is evidence that there is harm to the local industry.”
Anti-dumping duties can also only be applied for a restricted number of years (max five), and any extension requires a further investigation.
“Harsher AD duties cannot, therefore, just be implemented. A full investigation on pricing and harm is required. AD duties on poultry imports from the US have been imposed for many years (from 2000), with several extensions granted. In April 2024, the International Trade Administration recommended a further extension (approved by the Minister),” he said.
The issue raised by Hume International calls for local poultry producers to eliminate a negotiated exemption (subject to quota amount – called a tariff rate quota (TRQ) from AD duties imposed on imports of poultry from the US.
“This was negotiated when SA's continued participation in AGOA (African Growth and Opportunity Act) was threatened to be withdrawn. The issue is, therefore, not about imposing harsher AD duties. It is about removing the concession. Note that AD duties are imposed on top of the general tariffs,” he said.
AGOA provides eligible sub-Saharan African countries with duty-free access to the US market for more than 1800 products,
The imposition of AD duties has a significant impact on consumer prices.
He explained: “AD duties and general tariff increases raise consumer prices. These lower prices benefited low-income consumers the most. The reason is that the type of AD duty imposed on US imports is a specific tariff where a 940c tax is imposed on every kg of frozen poultry imported. Eliminating the import quotas under the TRQ with the US will harm poor households that consume chicken the most.”
Edwards added that local poultry producers will benefit from higher prices and less competition, but this will be at the cost of South African consumers, many of whom rely on poultry as a key source of their protein intake.
BUSINESS REPORT