South African poultry producers and importers are at odds over the introduction of rebates in chicken import tariffs. Producers fear a surge in imports, while importers express concern that the rebates might not materialise due to stringent conditions set by the trade regulator.
South African poultry producers and chicken importers are agonising over different aspects of the proposed introduction of temporary rebates in chicken import tariffs.
Producers worry that the rebates will be introduced, resulting in new surge of chicken imports. Importers, on the other hand, are now worried that the rebates might not come into effect.
Importers have championed the rebates idea, without mentioning the profits bonanza they might enjoy from increased import volumes and higher margins. They have been dreaming of rebates in force for a year at a time, guaranteeing them 12 months of higher revenues.
Now they see those anticipated profits disappearing because the barriers to getting rebate permits are too high and importers will actually have to prove that the rebates are needed.
Paul Matthew, head of the importers’ association AMIE said in an article in Business Day that “the likelihood of any rebates being granted is remote”.
He complained about the conditions permit applicants would have to meet. He said guidelines issued by the trade regulator, the International Trade Administration Commission (ITAC), included “a quota system, historically disadvantaged individual requirements, and a process to justify shortages”.
Justifying shortages is key to the whole issue. Matthew doesn’t say that the guidelines state at the outset that permits will only be issued if there is a shortage of chicken on the local market, and then only if that shortage is caused by bird flu outbreaks.
Neither condition pertains at the moment. Importers applying for rebate permits will know that, hence the pessimism that Matthew is expressing. Everything else is bluster.
