Anti-dumping duties against US chicken remain in place

Under the Itac anti-dumping regulations, duties must be terminated after five years unless Itac initiates a review or the domestic industry requests one.

The duties against chicken imports from the US were set to expire in November 2022. The South African Poultry Association (Sapa) brought a review application on behalf of 68% of the Southern African Customs Union producers. 

Itac received the review application in July 2022, and after all deficiencies were identified and corrected, an updated final application was received in September 2022. 

The local industry submitted sufficient evidence, and a prima facie case was made to allow the commission grounds for initiating a sunset review investigation.

Itac received responses from Merlog Foods, an importer of the chicken products under investigation. Other interested parties that responded included the USA Poultry & Egg Export Council and the Association of Meat Importers and Exporters. 

Final determination

The Itac investigation was initiated in December 2022, and the final determination of the investigation was published in the Government Gazette on Wednesday. 

The commission found that termination of the anti-dumping duties would likely lead to the continuation and recurrence of dumping and the recurrence of material injury to the local chicken industry.

Itac maintained duties of R9.40 per kilogram on whole birds cut in half, leg quarters, wings, breasts, thighs, drumsticks, and “other” portions.

Trade, Industry and Competition Minister Ebrahim Patel approved the recommendation. 

The US now joins the ranks of Brazil, Denmark, Ireland, Poland and Spain. Following an investigation, Itac found evidence of dumping from these countries and recommended the imposition of anti-dumping duties ranging between 2% and 265% on several importers. 

Patel agreed that the countries were dumping chicken meat in the local market but suspended the imposition of the duties for a year because of high inflationary pressure on South African consumers. The duties came into effect in August last year. 
Keeping an eye on prices

Patel at the time requested the Competition Commission and the Consumer Commission to carefully monitor poultry prices to determine whether local producers were capitalising on the duties by increasing their prices.

The Competition Commission announced in February that it will conduct a market inquiry into the poultry industry value chain. The poultry industry (broiler chicken and egg production) accounts for 65% of all animal protein consumed in South Africa.

The Competition Commission noted that the poultry industry is the largest contributor to the agricultural sector. The total annual gross value of production in 2022 was around R72 billion, accounting for 17.1% of total agricultural gross value and 40.3% of total animal product gross value.

But there is a rebate 

While government imposes anti-dumping duties on chicken imports on the one hand, it has also introduced an import tariff rebate on chicken imports on the other hand.

This rebate was aimed at preventing a supply shortage due to the number of highly pathogenic avian influenza (bird flu) outbreaks last year.

More than two million chickens had been culled by September last year, raising concerns about the supply and price of poultry, the staple protein for many South African consumers.

Sapa has, on numerous occasions, provided industry information to the government that there was, in fact, no shortage and that there was no significant increase in the price of chicken. 

However, the rebates have been in place for the first three months of this year, and it appears that government is considering extending them for another three months.

The temporary rebates do not apply to anti-dumping duties “as rebating these duties would remove protection afforded to the domestic producers of poultry against unfair trade practices”, Itac noted.

“The domestic poultry producers should rather be focused on competing against firms that do not make use of these unfair trade practices.”

Source:moneyweb