For more than 3 years now, the South African poultry industry has cried foul over the import duties charged on foreign poultry products. These import duties have come under scrutiny due to the surge in imports of foreign products, as well as the alleged dumping of poultry in the South African market, which has resulted in some local poultry producers announcing major retrenchments.  In response, the Department of Trade and Industry (DTI), in conjunction with the Department of Agriculture, Forestry and Fisheries, has been working with domestic poultry producers to address these challenges.

The South African Poultry Association’s summary report on poultry imports for November 2016 indicated that the total poultry imports for 2015 amounted to 478 447 tons, an increase of 21.6 %, in comparison with 2014.  In the first half of 2016, Brazil was the biggest poultry importer to S.A, followed by the Netherlands, Britain and Spain. The report went on to state that:

Poultry imports for 2016, up to November, amounted to 525 622 tons;
Imports from the EU contributed 63.1% of total poultry imports into South Africa in November, of which 88% were bone-in chicken portions; and
EU tonnages increased by 19.5 % on a month-on-month basis and up 48.1% on an annual basis.
According to the Bureau for Food and Agricultural Policy, the demand for bone-in portions of chicken is relatively non-existent in the EU while the demand for chicken breasts is considerably high, which enables producers to charge a premium on chicken breasts. Bone-in chicken is therefore more of a by-product for producers in EU countries. Foreign poultry producers can therefore sell bone-in chicken portions to the South African market at a reduced cost. The South African market has a high demand for bone-in chicken portions.

As part of addressing local poultry producers’ problems, in 2013, the import duty on several poultry products was significantly increased.  Current duties for chicken imports from countries including the US and Brazil equate to an 82% duty for whole birds, a 37% duty for "bone-in" portions, a 31% duty for carcasses and a 12% duty for boneless cuts. These import duties, however, are not applicable to imports from the EU due to the preferential trade agreement they have with South Africa.

Anti-dumping trade remedies have also been implemented. In 2015, anti-dumping margins between 3.86% to 73.33% were imposed on frozen bone-in chicken pieces from the UK, Germany and the Netherlands. There were already anti-dumping duties in place in respect of the US and Brazil.

EU Ambassador, Marcus Cornaro has recently dismissed the local poultry industry’s suggestions that European exporters are dumping bone-in chicken on to the SA market. Defending the EU, Cornaro pointed out that the prices of frozen chicken pieces from Belgium, Ireland and Spain are not the cheapest on the market. He has also noted that imports from the Netherlands, France, Germany, the UK, Hungary, Poland and Denmark are currently prohibited, due to the Avian flu ban on imports that was implemented late last year.

The South African government has placed a provisional safeguard import duty (applicable until July 3 2017) of 13.9% on frozen chicken legs imported from the EU. The EU and local importers, however, have challenged this decision arguing that the International Trade Administration Commission of South Africa (ITAC) had recommended the safeguard duty under the old Trade, Development and Cooperation Agreement (TDCA), which was repealed on October 10 2016 by the Economic Partnership Agreement (EPA). The EPA also provides for the imposing of a safeguard duty, but such duty needs to be justified on the basis of injury caused by trade that occurred under the EPA. Considering the EPA has been in force for such a short time, the argument is being made that such injury would be hard to prove. The outcome of this challenge has yet to be announced.