The South African poultry industry is bleeding to the core as a result of the European Union’s import decisions.
“According to Sol Motsepe, senior executive at the South African Poultry Association, seven major commercial producers have been liquidated; other companies are in the business rescue proceedings, more than 1,000 jobs lost in the past year, while the major local producers were losing millions of rands every week.
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Motsepe says import volumes have not changed significantly after the tariff increases on imported chicken from Brazil in September 2013 and that these threatened the continued survival of most companies – big and small.
‘Possibilities are that the industry will shed some jobs in the near future as companies attempt to survive,’ says Motsepe. ‘More imports are still coming from the European Union countries at an alarming rate. In 2012, for example, the production of poultry meat in the EU was almost 13 million tons, of which 77 [percent] was broiler meat. Of that total, the EU exported 1.43 million tons of poultry meat. ‘
Motsepe says South Africa is among the most unprotected in the world, resulting in European Union countries such as Netherlands, United Kingdom and Germany taking advantage of this to dump massive quantities of cheap chicken.
SAPA is waiting with bated breath on International Trade Administration Commission of South Africa (ITAC) to hear their findings and recommendation initiated to probe for dumping of frozen bone-in chicken portions.
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The investigation follows the recent increase of import duties on five categories of imported chicken products from Brazil and other parts of the world.
The new tariffs have already been introduced, however, they do not apply to imports from the European Union (EU), with which South Africa has trade and cooperation agreement.
SAPA brought an application against the European poultry producers and exporters for dumping their products in the South African Customs Union (SACU) countries. ITAC has accepted SAPA’s application on the grounds that there was prima facie evidence of dumping by the European countries that cause producers in SACU material injury.
SAPA submitted sufficient evidence and established a prima facie case to enable the commission to arrive at a reasonable conclusion that an investigation should be initiated on the basis of dumping, material injury, threat of material injury and causality.
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The request for anti-dumping duties on three European Union countries comes after last year’s increase in import tariffs on five categories of imported chicken products aimed mainly at imports from Brazil.
Following this tariff increase, importers to South Africa and exporters from Brazil and Argentina had predicted a shift to the EU chicken products as South Africa does not impose import duties on EU members because of trade and cooperation agreement signed in 2001.
However, South Africa may impose anti-dumping duties where there is prima facie case that local industry is suffering material injury from dumping by EU members.
‘It does not mean we do not want to get rid of imports. We just need fair trade and fair competition,’ says Motsepe. ‘If we are not protected against this unfair trade, smaller guys will be the first to feel the heat and go under,’” stated the South African Poultry Association in a recent press release.
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Source: SA Poultry via Paarl Post