30 June 2023
Iol News
by Banele Gindindza
The South Africa's poultry industry yesterday said that contrary to speculation on the country's potential loss of the Africa Growth and Opportunity Agreement (Agoa), the local sector would benefit from the stoppage of 72 000 tons of chicken into the market.
South African Poultry Association (Sapa) CEO Izaak Breitenbach said the industry did not export to the US, but that as part of the Agoa agreement, South Africa allowed duty free chicken imports.
This is as arguments rage back and forth in business and government over the US lawmakers’ recent request to move the upcoming Agoa Summit out of South Africa with fears of South Africa being potentially being excluded from the Agoa agreement before it reaches its next renewal date in 2025. Breitenbach said, “If the Agoa agreement is cancelled or South Africa is excluded, it may have a positive effect on the local poultry industry. South African farmers won’t have to compete with the dumped product and imports will decline. “
South Africa's poultry export market potential, currently only serviced at about 26 000 tonnes a year, not only to the US, but European Union (EU) and other blocs, including the zero-duty trade conditions under the African Continental Free Trade Agreement (AfCFTA), are limited by the lack of the sector's development to have appropriate infrastructure and systems to meet the health and safety standards of international markets.
Sapa has previously pointed out that development of the export market required huge financial investment as international markets are stringent on health and safety and required product free from antibiotics, hormones, brine, and feed that contains animal by-products.
Major foods importer Hume International's logistics and operations director, Roy Thomas, said there would not necessarily be an observable chicken shortage in South Africa per se, but rather that prices would outpace most South Africans’ wages. Under Agoa, South Africa is currently exempt from a R9.40 per kilogram of chicken anti-dumping duty for imports from America.
He pointed out that the impending of lifting of a suspension of tariffs by the Department of Trade Industry and Competition (Dtic) through the International Trade Administration Commission (ITAC) anticipated in August to be at 265% for Brazil, Ireland 158.4%, Poland 96.9%, Spain 85.8% and 67.4% for Denmark would likely alienate major trading partners, risking a shortage of supplies.
“If America pulls us from the Agoa agreement, imports from our second largest poultry importer may also become too expensive for local businesses and consumers to bear. The government should not underestimate the importance of Agoa. “It also needs to become more proactive in managing growing risks to chicken supplies by modifying its bird flu protocols, and only banning imports from individual states or areas impacted by bird flu rather than blocking imports from entire countries,” Thomas said. He argued that imports generally serve as a counterweight to local prices by introducing competition, which ensured that all market participants maintain fair prices while still making a profit.
“The trouble with shortfalls in import supplies is that the local market may then lose its ability to regulate the price of locally produced chicken against that of international producers, potentially seeing local producers significantly boost their prices, “he said. Brazil importsMeanwhile, Fairplay, a fair trade advocacy group, has said that chicken imports from Brazil have increased to an all-time high of 600% in the month to April after the Dtic's decision to suspend tariffs from countries including Brazil.
It said data from the South African Revenue Service (Sars) indicated that imports of bone-in chicken portions, mainly leg quarters, from Brazil had been high this year. In April, the latest month for which statistics are available, imports of bone-in chicken from Brazil were six times higher than in August last year, when the anti-dumping duties should have been imposed.
“Monthly imports reports, compiled by the SA Poultry Association from official Sars statistics, show how imports of bone-in chicken from Brazil have climbed since that decision. The increase started last November and has been particularly notable this year,” Fairplay said.
And import statistics show how poultry imports have increased since the South African government refused to implement anti-dumping duties on chicken portions from Brazil and four European Union countries last year. There has been a sharp increase in imports of bone-in chicken portions this year.
Volumes rose from 4 881 tonnes in January to 12 195 tonnes in March, dropping to 8 853 tonnes in April, according to the latest official statistics available. Monthly totals in two months this year were double what they were in August last year, when the anti-dumping duties should have been imposed. In March they were three times as high.
Yesterday Chicken Facts took Fairplay to task and said the Brazil figures were incorrect. FairPlay once again manipulated the trade statistics to suit their narrative of dumping. “They took stats for August 2022 - a month with a low import volume of 572 metric tons - and compared it with stats for April 2023 which had a high volume of imports of 3530 metric tons, conveniently ignoring all the differing monthly books in between.
This is problematic as FairPlay is looking at a six-month period before the anti-dumping duties were suspended,” it said. The Dtic's spokesperson, Bongani Lukhele, said it would need to verify the Fairplay figures using data from the Sars, but confirmed there was currently no cap on poultry imports from Brazil.