Picture: REUTERS/PAULO WHITAKER
Picture: REUTERS/PAULO WHITAKER

I refer to the article by renowned economist Mike Schussler (“Why do Brazil’s chickens cross the ocean? To fly over SA tariffs”, June 2). Let me say upfront that I have been one of his biggest fans and have learnt a lot from his tables, charts and analyses. He remains my favourite local economist.

However, I find his sudden urge to write to Business Day on chicken matters right in the middle of a dumping duty application by his client, the SA poultry industry, more than a little curious. Furthermore, his pieces have been focused on imports from the EU and Brazil, not coincidentally the identical areas that are the subject of the current investigation.

He has not bothered to extend his own research and findings to other major exporters of poultry to SA such as the US and Argentina. Why not, considering that the US volumes are very high?

His previous contribution (which Business Day referenced) was, in my view, factually incorrect in many areas, as were some of his assumptions. This was pointed out by a respondent (which you also referenced). I feel that this piece has added to the confusion through the selective use of information.

Schussler may well be correct in his assertions that manipulations of product descriptions are occurring with the aim of avoiding or reducing duty payments. I have been out of the industry for too long to have an informed view on this, but if this is happening it is serious, and should be referred to the relevant authorities to deal with in terms of the law.

However, I would merely like to make the following points:

  • No sane importer would declare chicken cuts as whole birds because the latter attracts higher duties.
  • SA also imports chicken carcasses, which are substantially cheaper than either whole birds or cuts, resulting in lower duty payments. Is there some product confusion here?
  • SA imports chicken for onward export to neighbouring territories. The SA Revenue Service does not include these in its import statistics. I presume Schussler would have taken these into account.
  • In a previous antidumping application against Brazilian chicken in 2012 Schussler’s client, Brazil, referred the matter to the World Trade Organization as the investigation was, in its view, highly flawed. SA’s response was to withdraw the charges and embarrassingly retreat, and then had to refund a fortune of provisional dumping duties charged.

My last point is made because I have personally studied the current investigation as an uninvolved but industry-experienced party, and I believe the case is a poor one. If there is no political pressure exerted, the application will again fail.

I could well be wrong, but either way I think it is too early to be counting our chickens, especially if you are an adviser to one of the parties.

David Wolpert
Rivonia

JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length. Send your letter by e-mail to letters@businesslive.co.za. Anonymous correspondence will not be published. Writers should include a daytime telephone number.

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.