The South Africa Poultry Association (SAPA) has raised its voice, advocating for the reinstatement of antidumping duties at 30%, which it believes will play a pivotal role in preventing unfair trade practices and protecting the country’s competitive local poultry industry. A recent report released by SAPA highlights that the imposition of these duties would result in a moderate price increase of chicken products in retail outlets, ranging from 0.9% to 4.9%.
According to SAPA’s General Manager, Izaak Breitenbach, the potential pass-through of dumping duties to consumers would have a relatively minor impact compared to other factors affecting prices, such as load-shedding and rising feed costs. Load-shedding, a recurring power supply issue in South Africa, has been responsible for a significant 10% increase in prices for large local producers and an even higher 20% increase for smaller producers over the past year. Breitenbach highlighted that load-shedding has added approximately R1.20/kg to the price of chicken products in retail outlets.
SAPA enlisted the expertise of independent economics firm Genesis Analytics to conduct a study on the impact of antidumping duties on the retail price of chicken products. The investigation revealed that certain poultry-exporting companies in Brazil, Denmark, Ireland, Poland, and Spain were participating in dumping chicken products in South Africa, causing substantial harm to the local poultry industry.
Antidumping tariffs of 30% would likely result in a price increase for chicken products within the range of 2.5% to 4.5% in retail outlets. However, the quantum of duties imposed on importing firms varies significantly within countries. For instance, Brazilian exporters could face duties ranging from 6% to 48% of the total antidumping tariff, depending on their specific situation. Genesis Analytics emphasized that this variance and changing import markets would somewhat dilute or mitigate the impact on local prices.
It is worth noting that South Africa is renowned as one of the top three most competitive poultry producers globally, offering the cheapest chicken products in South African rands. Despite this competitiveness, the local industry is at risk due to the dumping of chicken products from the aforementioned countries. SAPA argues that while the industry does not require protection, it does need safeguards against unfair trade practices.
Previously, provisional anti-dumping duties were temporarily suspended for twelve months in July 2022, owing to concerns about their potential impact on chicken product prices. However, SAPA’s report indicates that there has been no evidence of reduced prices for locally sold imported chicken products during the past year. On the contrary, chicken imports have seen a substantial 600% surge, increasing from 17,000 tons imported in October to 46,000 tons imported in March.
This influx of imports poses a significant threat to the local poultry industry and the jobs it provides, despite being the outcome of unfair and anticompetitive trade practices. As SAPA advocates for the reinstatement of antidumping duties, the focus remains on safeguarding South Africa’s poultry industry, ensuring its continued competitiveness and sustainable growth in the face of global challenges.
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