The announced rebates on poultry imports have sparked confusion and concern among stakeholders, with discrepancies emerging between what South Africa’s trade regulator has announced and what was initially proposed.
Last week this bulletin reported that the rebates on poultry imports would be worse than had been intended by the trade regulator, the International Trade Administration Commission (ITAC).
As confirmed by XA trade advisors, the tariff on bone-in chicken imports which compete with locally produced frozen packs would be 25% after the rebates, instead of the 37% that XA said ITAC favoured. Conversely, the rebated tariff on boneless cuts, imported in far smaller quantities, would be 30% instead of the 12% that ITAC wanted.
Since then, ITAC has issued a media release in which it says – guess what? Rebated tariffs on bone-in chicken portions will be 37% and on boneless cuts they will be 12%.
These are the tariff rates that applied before increases in 2020, and chicken importers have been agitating for a return to those levels.
There’s only one problem. As far as FairPlay can see, the new rates that ITAC says will apply have not been gazetted.
The last government gazette on the issue was published on 29 January. It stated that the rebates that would apply would be “full duty less 25%” for bone-in portions and “full duty less 30%” for boneless cuts.
These are the rates that XA explains mean effectively that the current 62% tariff on bone-in portions will be reduced temporarily to 25% and the 42% tariff on boneless cuts will come down to 30%. But that’s not what ITAC says – it maintains the effective rates are 37% and 12%.
So what’s the truth? We’ll know in the near future when ITAC announces the outcome of the first applications for rebates.
Logic says the applications should be turned down, because permits can be issued only when there’s a shortage of chicken on the local market, and only when that shortage is caused by bird flu outbreaks. Neither condition applies at the moment, and both are necessary if ITAC is to approve rebate permits.
However, election years bring political pressure, and ITAC’s independent status could be sorely tested.
The ITAC statement opened with “a degree of concern” that some stakeholders (read poultry producers) had reacted with dismay and even anger to the rebates announcement.
What did it expect? Fulsome praise for an unnecessary scheme to solve a non-existent problem? Support for a plan which could result in a damaging flood of imports into market that is already in oversupply?
It should instead take the poultry industry’s views into consideration – preferably by calling for submissions – when it looks at requests from chicken importers for rebate permits.
