By Francois Baird. First published in the Business Day on 8 June 2020.
The global impact of the Covid-19 pandemic poses a new threat to SA’s chicken industry, and probably to other industries that have suffered from massive amounts of dumped imports. Action is needed now to ensure these industries are stabilised when lockdown ends. Antidumping tariff applications need to be implemented urgently.
Around the world lockdowns closed restaurants, hotels, caterers and fast-food outlets. Demand for chicken plummeted but production continued. There are mountains of frozen chicken in the EU and elsewhere, and the easing of lockdowns will not make much of a dent in that stockpile.
EU chicken producers, which have dumped huge volumes onto the SA market, have called for a halt to imports into the EU because “poultry meat is piling up and freezers all over the EU are already full”.
The irony of that situation will not be lost on South Africans. However, the stockpiles are also a renewed threat to our market because one way to reduce them will be to dump more chicken in SA.
That will not happen immediately — import volumes are dropping, probably more from exchange rate changes and reduced demand than recent tariff increases — but when the SA market opens up again, the onslaught will resume with added vigour. The antidumping tariffs must already be in place then.
Chicken importers will profit handsomely, but not consumers, because low import prices don’t get passed on. Those who will suffer will be South Africans in the chicken and grain industries who will lose their jobs, and those who will not get jobs because local expansion won’t happen.
Other vulnerable industries — textiles, dairy, steel, cement — may face import surges because the pandemic is affecting supply and demand around the globe. All need to act now, because the dumpers and predators are coming.
