No rebates means no bonus for chicken importers

Import tariff rebates were in place for the first three months of the year, but there has been no announcement of a renewal for a second quarter after the first tranche expired at the end of March.

The rebates were introduced, despite protests from the local poultry industry, because the government wrongly believed there was a shortage of chicken on the local market. The SA Poultry Association (SAPA) has shown that there was no shortage in the first quarter, and that local supply is back to normal after last year’s bird flu outbreaks.

The industry said there was no justification for the rebates in the first quarter of 2024, or in the second quarter from April to June. 

Poultry producers are hoping that the government’s silence means that the rebates fell away at the end of March, and will not be renewed because they are unnecessary and will harm local chicken farmers.

On the other hand, chicken importers will be hoping against hope that a retrospective rebate renewal is announced, giving them a huge refund of tariffs they have already paid over the past three months. This is in addition to the many millions they would already have received in refunds for January, February and March.

Official statistics are available so far only for April, but the amounts involved are substantial and April saw a big rise in import volumes. 

The largest import category to which rebates would be applied is offal – chicken livers, feet, heads etc. In April, South Africa imported 15 413 tonnes of chicken offal with a landed value of R160.6 million.

In terms of current regulations, these imports would be subject to a tariff of 30%. But if rebates are instituted, that tariff drops to zero, and the 30% they have paid will be refunded to importers. The same would happen for offal imports in May and June this year.

The next largest category is bone-in chicken portions, such as leg quarters, thighs and wings. Imports in April were 5 193 tonnes, valued at R113.9 million. To those millions would have been added a 62% import duty – but it would be reduced to 37% if a retrospective rebate is applied. Ditto for May and June.

For chicken importers, the tariff rebates must seem like a massive and very welcome tax refund. No wonder they are agitating for rebates to be implemented for the second quarter, even though that period has nearly ended.