Hiking import tariffs will hurt SA, says Brazilian poultry association

An association representing Brazilian poultry exporters has warned of the dire consequences for SA consumers and the broader economy should a new application for a hike in import tariffs on frozen chicken portions be granted.

SA’s poultry sector has shed hundreds of jobs in recent times and blames this on cheap chicken imports. Brazil is the world’s largest poultry exporter. 

The SA Poultry Association’s (Sapa’s) application to the International Trade Administration Commission — the organisation tasked with customs tariff investigations, trade remedies, and import and export control — calls for an increase to the ad valorem tariff on bone-in and boneless frozen chicken portions to 82% from existing levels of 37% and 12% respectively.

The Brazilian Association of Animal Protein said the argument that SA, as a “globally efficient producer of chicken” faces profit challenges and job losses due to imports of frozen chicken, “does not sustain itself”. 

“Whereas one of the main reasons SA is facing difficulties is that SA poultry production has been highly affected by bird flu (pathogenic avian influenza) since 2017,” the association said.

According to the Fairplay organisation, which aims to fight predatory trade practices and dumping, the higher tariff would help stem the flood of imports from countries such as Brazil, which has “ramped up its assault on the SA market while EU imports have been largely blocked by bird-flu bans”.

The Brazilian association said domestically produced chicken meat combined with imported chicken meat has proven to be a safe, efficient and reliable way to meet the growing demand for fresh and frozen chicken products in SA, since chicken imports complement local supply to meet the increasing domestic consumption.

“These partnerships create jobs locally and benefit processors, restaurant chains, retailers, wholesalers and especially the SA families, who have access to healthy, top-quality poultry meat. The requested tariff-rate increase in frozen poultry products would also affect the domestic prices for SA consumers, given that imports would be more expensive and there would be a lack of supply by SA’s production.”

In December Fairplay, trade unions and various civic organisations backed the application for a tariff hike.

“We have watched in dismay as a highly competitive local industry has been reduced to an existential crisis by years of steadily increasing imports of chicken portions dumped below the cost of production,” said Fairplay founder Francois Baird.

“Higher tariffs will help protect the industry and the thousands of jobs which are at risk because of these opportunistic imports that have been steadily rising to the point where imports now claim between a quarter and a third of the SA market.”

As a result, he said, smaller producers have gone out of business and larger ones have contracted, shed jobs and been forced to change their business models.

Food and Allied Workers Union general secretary Katishi Masemola appealed to the government to grant the new tariff to slow down the imports that threaten the survival of the local poultry sector.

“Let South Africans produce the food that our people eat … SA chicken producers should be expanding and creating jobs, not the opposite. This is the biggest sector of the agricultural industry and tens of thousands of workers depend on chicken production for their livelihood, particularly in rural areas where unemployment is an epidemic,” said Masemola.

phakathib@businesslive.co.za