A Closer Look

ITAC investigation

The International Trade Administration Commission (ITAC) have already imposed provisional anti-umping duties on poultry imports from Brazil at 265%, Demark at 67%, Ireland at 97%, Poland at 85% and Spain at 85%

An announcement this week regarding a further two corrections, in provisional import duties imposed by ITAC, (Business Day, February 15) raises concerns about the process in determining provisional payments. There are serious concerns that the domestic price of chicken will increase even further. According to statistics gathered by ChickenFacts, the price of whole chicken has risen by an average of 10% a year over the last ten years, and it is feared that further import tariffs might make chicken unaffordable for the low and middle-income consumer.

The International Trade Administration Commission have already imposed provisional anti-dumping duties on poultry imports from Brazil at 265%, Demark at 67%, Ireland at 97%, Poland at 85% and Spain at 85%. This means that South African consumers will no longer have affordable protein from these countries, as they will be completely shut out of the market. This could also have a devastating effect on food security for South Africa, as there are just no alternatives.

If you are reading this article, it is most likely that you won’t be impacted in any way, as you are able to afford poultry not matter what the price. The consumers most impacted, have no idea what’s happening with import duties and tariffs and when poultry is no longer a viable option they will switch to an alternative source of protein that is within their budget range.

Paul Matthews, CEO of the Association of Meat Importers and Exports (AMIE) said “ The current duties only remain in effect until June 14, when the International Trade Administration Commission (ITAC) make their final determination. However, we are not certainly how ITAC make their determinations when the importing price is similar but the anti-dumping regulations vary from 85% to 265%?”

The first anti-dumping laws were enacted in the U.S. in 1897, and many countries have followed suit and enacted their own anti-dumping laws. The laws are, in my view, not based on solid economic theory and are susceptible to significant manipulation on the ‘average price’ or ‘average cost of production’ specifically for meat and poultry products. South African importers are not purchasing poultry at lower prices than the rest of the world, they are importing at market value.”

“Trade duties are not supposed to be a long-term strategy to prop up an ailing poultry industry that is beset with structural inefficiencies,” he said. According to an investigation by ChickenFacts, bone-in poultry has decreased as seen in the bar graph below using to South African Revenue Services data. The shortage of product in the market has had a major impact on local manufacturers and retailers.

 

 

True dumping in the market in South Africa took place over the last four months of the anti -dumping investigation period, with one the three biggest producer’s selling Chicken Grillers at R16. Into the market versus a reported production cost of R23, this is but one example discounted items during this period.

“One needs to ask what has happened to the Poultry Master Plan,” continued Matthew. “The core underpinning object of the plan was for local producers to export to trade partners overseas. Three years since signing the plan nothing has happened. Instead, South Africa continues to alienate their trading partners around the world with anti-dumping duties, a punitive trade policy that will not solve the challenges faced by the local poultry sector, but will increase the hardships of cash-strapped South Africa consumers.”

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