Beijing — China will impose temporary antidumping measures on imports of Brazilian chicken, it said on Friday, at the same time as the US puts pressure on Beijing to reopen its market to US poultry products.

Chinese importers of Brazilian chicken were required to pay deposits ranging from 18.8% to 38.4% of the value of their shipments from Saturday, the commerce ministry said.

A preliminary ruling from the ministry found that Chinese producers had been "substantially damaged" by shipments from Brazil between 2013 and 2016, when the country supplied more than half of China’s imports of chicken.

The antidumping measures are another blow to Brazilian meatpackers, recovering from a food-safety scandal in 2017 and a May truckers’ protest that forced farms to cull 70-million chickens due to lack of feed.

Third-party countries

They also show how third-party countries like Brazil, the world’s largest chicken exporter, could become collateral damage as the US and China look for ways to head off a trade war. Though the Chinese government calls the measures "deposits", which in theory could be returned in future, a source in the Brazilian meat industry, who asked for anonymity due to the sensitivity of the issue, said that in practice nobody ever gets them back.

The Brazilian government said it regretted the measures, adding it had followed the antidumping investigation and found no basis for the Chinese move. It hopes China will scrap the provisional punitive measures once the probe is finished.

Shares of Brazil’s BRF, the world’s biggest chicken exporter, closed 7.5% lower at 21.50 reais ($5.80) in São Paulo on Friday. Rival JBS, whose US poultry unit, Pilgrims Pride, is larger than its Brazilian division, Seara, rose 4.1%.

BRF and JBS declined to comment on the matter.

Brazilian protein industry group ABPA denied any causal link between the chicken shipments and any harm to Chinese producers, calling the antidumping measures a step backwards in the countries’ strong bilateral trade relations.

The measure comes a year after China implemented antidumping measures against another leading Brazilian commodity. In May the 2017 Chinese government imposed hefty penalties on sugar imports.

Brazil used to be the largest exporter of sugar to China, but after the measure shipments are expected to fall by as much as 800,000 tonnes year.

While the initial result of a probe on poultry imports that started in August 2017 is expected in June, China’s move on Brazilian chicken appears as the US pushes to recover access to the Chinese poultry market.

China has agreed to increase imports of American farm goods in recent negotiations aimed at averting a trade war.

About 9% of Brazil’s chicken exports went to China in 2017, according to ABPA, which said the flows were likely to be maintained because of strong Chinese demand.

The Brazilian industry source said the Chinese commerce ministry had proposed further negotiations with exporters, including the possibility of a floor price for exports to China. It is not yet clear if the industry would accept such a proposal, the source said.

Brazilian exporters should be able to absorb the impact of the deposits, particularly for chicken feet, which would otherwise have no value, said Pan Chenjun, analyst at Rabobank.