Quotas are about volumes, but importers focus on retail prices

Importers welcome tariff rebates, but their emphasis on pricing overlooks that imports make up only 20% of the local chicken market, raising concerns about the impact on local producers and jobs.

Chicken importers, predictably, have welcomed the rebates announcement. Equally predictably, in calling for the rebates, they have once again given the impression that the South African chicken market is dominated by imports, and that any price change in imports will move retail prices up or down to a significant extent.

In fact, by their own calculations, imports comprise 20% or less of the local market. That means that local chicken producers supply 80% of more of the chicken on local supermarket shelves.

Imports do not determine chicken prices. They undoubtedly have an influence, providing competition and moderating price increases to the benefit of consumers and, when it comes to dumped imports, suppressing prices, harming the local industry and costing local jobs.

Any import tariff rebates will apply only to a portion of imports, which in turn are only a portion of the local market.

On the other hand, if the rebates are applied, they will encourage increased volumes of both legal and dumped chicken imports – specifically the bone-in chicken portions such as leg quarters which compete with locally produced frozen packs. The local industry has secured anti-dumping duties against bone-in imports from nine countries – that is going to be undermined by a 25% reduction in the 62% general tariff on bone-in imports from non-EU countries.

Importers have not so far spoken about import volumes – their focus is retail chicken prices, which they know is a sensitive issue for the government.