Chicken Industry

Comprehensive tariff restructure is in the offing

A complete review of the tariff structure for poultry imports is underway, and it might have very interesting outcomes.

The Minister of Trade, Industry, and Competition, Mr Ebrahim Patel, has instructed the tariff regulating body, the International Trade Administration Commission (ITAC) to “review the entire tariff structure for poultry”. That’s pretty comprehensive.

The instruction was published in the government gazette on 16 March 2021. It invited interested parties to make representations on specific aspects within four weeks. These aspects include introducing specific rather than ad valorem duties, considering specific anti-dumping measures, introducing import tariff rebates for exporters, and a possible entry price system. 

All these issues were raised in the 2019 Poultry Sector Master plan, agreed by government, local producers, importers and labour unions.

Changing anti-dumping duties to a specific amount might be more effective than the present ad valorem duties, which are a percentage of declared value. Bone-in portions such as leg quarters, wings and thighs are all imported at different prices and the import duty (say 62%) applies to that price. The exception is the United States, which in addition is subject to an anti-dumping penalty of R9.40/kg on all bone-in imports.

Countries dumping chicken here have shown they are able to lower prices to counter new tariffs. A specific duty such as the one applying to the US cannot be altered, and it has apparently been effective. The US negotiated an annual quota free of anti-dumping duties as part of the 2016 AGOA trade agreement, but any volumes above the quota would be subject to these duties.

Importers and exporters will be delighted at the possibility of lower tariffs on imports because they also export poultry. However, export volumes are small – 50 000 tonnes in 2020, compared to broiler imports excluding mechanically deboned meat (MDM) of 259 000 tonnes. Perhaps the proposed rebate is intended to galvanise the Association of Meat Importers and Exporters (AMIE) into some real export action.

The government gazette, number 44277 of 16 March 2021, can be downloaded here.