Europe’s cheap chicken still a threat to SA poultry, says Sapa

South Africa has launched a sunset review of antidumping duties on frozen bone-in chicken imports from Germany, the Netherlands and the UK, just days before the existing duties are due to expire, with the domestic industry pushing for them to remain in place.

South Africa in 2015 imposed antidumping duties of 3.86%-73.33% on frozen bone-in chicken portions originating in or imported from a number of firms in Germany, the Netherlands and the UK.

The tariffs were extended in 2021 and are set to expire on Friday. However, the South African Poultry Association (Sapa), which represents the likes of Astral, Grain Field Chickens and Rainbow, has asked for the duties to be extended by another five years.

“The applicant (Sapa) alleges that the expiry of the duties would likely lead to the continuation and recurrence of dumping and material injury to the Southern African Customs Union (Sacu) industry,” the International Trade Administration Commission of South Africa (Itac) said in a government notice.

“The applicant submitted sufficient evidence and established a prima facie case to enable the commission to arrive at a reasonable conclusion that a sunset review investigation of the antidumping duties on frozen bone-in portions originating in or imported from Germany, the Netherlands and the UK should be initiated.”

The trade regulator found that the margin of dumping (the amount by which a product’s price in the home market or cost of production exceeds its export price) for Germany was determined at 425.64%, for the Netherlands at 32%, and for the UK at 61.84%.

A sunset review of antidumping duties is an official investigation conducted before a set of trade tariffs expires — typically after five years. Its purpose is to determine if removing the duties is likely to cause dumping and material harm to local industries to start up again. If the risk is real, the duties stay; if not, they end.

Itac has arrived at a preliminary view that the antidumping duties remain in place due to the information provided to it by Sapa, subject to it concluding its investigation.

“The applicant alleges and submitted sufficient evidence to show that it would experience an increase in imports, decline in sales volume, decline in profit, decline in capital expenditure, decline in capacity utilisation, decline in output, decline in growth, decline in productivity, decline in investment, decline in cash flow, increase in price depression and increase in price suppression if the duties expire,” Itac said.

“On this basis, the commission found that there was prima facie proof of the continuation and recurrence of material injury if the duty expires.”

Business Day