The SA Poultry Association (Sapa) has announced that it has applied for anti-dumping duties on imported chicken from five countries – Brazil, Denmark, Ireland, Poland, and Spain.
“We have proof that these countries have been dumping frozen chicken portions onto the South African market, which is unfair competition for local producers, big and small, and costs local jobs,” said Izaak Breitenbach, general manager of Sapa’s broiler organisation.
“They are bringing frozen chicken portions into South Africa, often at prices lower than their production costs, and/or less than they are selling the same product for in their home markets. This not only constitutes dumping under the World Trade Organisation (WTO) and South African rules, but it is also unfair because it creates jobs in producer countries while stifling economic growth here.”
Breitenbach confirmed that these unfair practices had been raised in discussions with the European Union’s (EU) representatives in South Africa and the EU export organisation, AVEC. It was conveyed that if not addressed, anti-dumping duties would be sought. The application seeks anti-dumping duties based on the difference between what frozen chicken portions are sold for in the producer country and the lower export price of frozen chicken portions to South Africa. Dumping margins up to 201% have been found.
Breitenbach said the anti-dumping application was necessary as dumped imports were causing material injury to the domestic industry, despite the existing tariffs.
“This is a continuing process because exporting countries develop ways to counter-tariffs, including lowering their prices,” he said. “Unfortunately, these prices – as low as R6,86/kg – are not passed on to consumers, but merely create additional profits for the import value chain.”
The application has been submitted to South Africa’s International Trade Administration Commission (ITAC), which will investigate the complaint before making a recommendation to the minister of trade, industry and competition. The process is expected to take approximately twelve months.
The application is supported by many organisations and entities, from grain producers, smallholder farmers, and contract growers to the majority union in the chicken industry and companies dependent on the poultry value chain, such as equipment and feed suppliers.
“In the poultry sector master plan established in 2019, the industry undertook to continue to produce affordable chicken for the local market, and we are delivering on that commitment. In addition there is extensive price monitoring under the master plan.
“Our application provides evidence of dumping based on prices in their local markets and import prices here,” Breitenbach said. “The fact that we now have evidence of dumping by nine countries shows the extent to which South Africa is a target for countries dumping surplus chicken.
“Applying for anti-dumping duties is a costly process, but our industry is under continuous attack from unfair competition, so we have no choice but to act. As much as R6,1 billion leaves the country every year through poultry imports only. This in a country with an expanded unemployment rate of 43%. Just imagine the positive impact it would have on the economy and on job creation if that amount was instead invested locally.
“The purpose of the applications is to level the playing field, ensuring fair competition in the South African market by eliminating the unfair advantage exporting countries have because they are not charging fair prices. The South African chicken industry is highly competitive by international standards, and we produce chicken at a lower cost than EU countries. Yet EU countries continually dump chicken here because they will take any price they can get for surplus chicken meat their markets do not want.
“Brazil does the same, even though their subsidised production costs are lower than ours. Some of their imported chicken is priced at approximately half of what it costs them to produce it.
“The situation has become more precarious since Covid-19 disrupted retail globally, so chicken-producing countries have overflowing cold-storage facilities and are looking for markets to target with this surplus. We expect a renewed onslaught and we must be vigilant and use the trade remedies that are available to us, to protect South African jobs.” – Press release, Sapa