The process has started for a renewal application for South African anti-dumping duties against chicken imports from the United States.
According to a notice in the Government Gazette, South Africa’s trade regulator, the International Trade Administration Commission, has decided there is “sufficient evidence and a prima facie case” to justify an investigation into an application by the SA Poultry Association (SAPA) and others on behalf of poultry producers in the SA Customs Union (SACU) area.
During that investigation, the regulator will contact producers, exporters and importers to determine whether dumping is continuing, and if so what duties are required to counter the low dumped import prices.
Anti-dumping duties have been in place against the US since 2000, and have been renewed every five years. The current duties expire on 23 November, and the renewal investigation is termed a “sunset review”.
The current anti-dumping duty is R9.40/kg on imports of US bone-in chicken portions, such as frozen thighs and leg quarters. While it is understood that SAPA has applied for a renewal of this duty, known as a specific duty, ITAC published a list of percentage based “dumping margins” – the extent to which imports were lower than selling prices in the US.
This could lead to percentage-based, or ad valorem, anti-dumping duties such as apply to other countries. The percentages in the government gazette range from 175% to 279% for various chicken portions.
Since 2016, the US has been able to import a significant quota of chicken portions free of anti-dumping duties. This was a last-minute condition imposed by the US for its agreement to an extension of the AGOA trade agreement, which gave many South African industries duty-free access to the US market. For the benefit of these industries and the national economy, the poultry industry agreed to “take one for the team”.
From March 2020, US bone-in chicken imports have also been subject to a general tariff of 62%. SAPA has said that the combination of the general tariff and the R9.40/kg anti-dumping duty “has been adequate to limit US bone-in portions to close to the agreed quota”.
That quota is currently just over 71 000 tonnes of bone-in chicken and even after 62% tariff it comes in at prices that are resented by the South African industry. XA Global Trade Advisors says this quota is unlikely to remain in place when AGOA is reviewed in 2025.
If that happens, any anti-dumping duties applied now would hit all US chicken imports after 2025, not only the infrequent above-quota amounts as is currently the case.