Chicken Dumping Probe Now at Preliminary Stage

SOUTH AFRICA - The investigation of the Brazilian chicken antidumping case is "at a preliminary determination stage" and a report is due to be published by the middle of this month.

2 February 2012

3 minute read

Africa

The case — about whether to increase the import tariff on imported Brazilian chickens amid fear they are being "dumped" onto the South African market — has been characterised by emotive arguments, mudslinging and contradictory statistics in the public domain.

The International Trade Administration Commission (Itac) — which is responsible for customs tariff investigations, trade remedies, and import and export control in SA — started its investigation in June.

The application for additional duties against Brazilian exports of whole birds and boneless cuts into SA had been brought by the South African Poultry Association (Sapa), which represents some of the larger players in the industry.

According to BusinessDay, Itac said yesterday that interested parties would be given an opportunity to respond to its preliminary determination before it makes a final decision.

An interested party, the Association of Meat Importers and Exporters (AMIE), had made submissions to the commission, saying that while the chicken industry claimed to be prejudiced by Brazilian imports, the industry was thriving.

What irked the body was the way in which the imported product had been identified in the application.

Donald MacKay, a director at XA International Trade Adviso rs who advises the AMIE, said the inclusion of carcasses under the classification of "whole birds" artificially increased the volume of exports of whole birds from Brazil to SA.

It also artificially lowered the price of the exported product — because carcasses are cheaper than whole birds — supporting the claim SA is flooded by cheap imports.

Subsequent to the application for further tariff increases, carcasses had been classified under their own tariff subheadings. Therefore, the AMIE argued that an adjustment for the carcasses had to be made.

Ms Zoleka Xabendlini, senior manager of trade remedies at Itac, said the representations about classification had been considered by the commission, but he declined to comment further.

AMIE CEO David Wolpert said that imports as a percentage of local production of comparable products (whole birds and boneless cuts) were between 8% and 10%. The association was concerned that competition could be eliminated under a perceived threat of dumping.

This could have a devastating effect on prices for local consumers, Mr MacKay said.