Strong reactions to delay in anti-dumping duties

There’s been no shortage of reaction in the past week to the decision by the South African government to postpone for 12 months the imposition of anti-dumping duties on poultry imports from Brazil and four European Union countries.

The local poultry industry expressed “surprise and disappointment” at what it saw as a failure to honour a commitment in the 2019 poultry master plan to act against unfair trade and chicken dumping. Their view that further investment to expand capacity might have to be delayed was widely reported.

Chicken importers, of course, were delighted – they get another 12 months of unrestrained profits. Also unsurprising was the welcome for the delay from the Democratic Alliance. South Africa’s largest opposition party predictably opposed duties and supported chicken importers.

But there was strong backing for the poultry industry by the SA Local Government Association (SALGA) and the Food and Allied Workers’ Union (FAWU), which represents workers in the poultry sector. Both saw potential job losses, including the closure of small-scale farms and small businesses.

FAWU general secretary, Mayoyo Mngomezulu also highlighted how a weakened local poultry industry would reduce the cull trade, where millions of live chickens are sold by poultry producers to traders who distribute them in townships and rural areas.

“it is even worse for the informal economy, as most poor communities survive through selling chickens on the streets,” he said.

Across social media, news of the suspension of anti-dumping duties was widely opposed by small poultry farmers, who rallied to the hashtags #stopchickendumpingSA and #stopchickendumping on Twitter.

These small chicken farmers, many of whom are based in rural areas, will find it much harder to sustain themselves and their families now that they have to compete with more predatory imports dumped below the cost of production. 

When much of the fuss had died down, Trade, Industry and Competition Minister Ebrahim Patel weighed in.

He backed the poultry industry, he backed his master plan and he backed the imposition of anti-dumping duties – because chicken dumping was proven. It was just that they would have to be delayed for 12 months at most, so as not to contribute to rapidly rising food inflation.

12-month delay may end up a bit shorter

Minister Patel’s interview on Radio 702 will have pleased many in the local poultry industry. He was unworried by the industry’s strong stand, and the possibility of an investment delay (he expected both producers and chicken importers to “fight from their corner”).

Importantly, he hinted that the delayed anti-dumping duties may be imposed sooner than 12 months. The period “could be shorter if circumstances warranted, if we see food prices are not spiking as much,” he said.

That prospect may be in sight. July saw a very significant drop in world food prices. The United Nations Food and Agricultural Organisation (FAO) said last week that its world food price index for July was down 8.6%. This was the largest single-month fall since 2008, and the fourth consecutive month the index has dropped.

One of the contributing factors was the first shipments of grain from war-torn Ukraine. The prevention of exports which feed millions around the world had helped to send world food prices soaring.

If that declining trend continues, and is replicated in South Africa, the poultry industry will doubtless hold Minister Patel to his commitment to impose the anti-dumping duties he has approved, but postponed.