Chicken dumping is a strange global trade phenomenon. It is not caused by production efficiencies but by northern hemisphere dietary preferences.
Consumers in wealthy regions such as the European Union or North America prefer chicken breast meat, which sells at premium prices. Large-volume poultry producers in Brazil, the EU and the United States make their profits from the sale of this white meat, and are then left with a surplus of brown meat – the bone-in portions such as leg quarters that northern consumers don’t fancy.
This unwanted surplus is sold off in frozen bulk packs to any market that will take it at any price the buyers are prepared to pay. It is, quite literally, “dumped” in countries such as South Africa where chicken leg quarters, thighs and drumsticks are popular.
The production cost is not relevant, because dumped chicken can be sold way below the cost of production. Prices can vary and have been dropped to counter the effect of tariffs or anti-dumping duties.
Competitiveness is also not an issue. Expert studies have found repeatedly that South Africa produces chicken at a lower cost than European Union countries, but EU producers have been able to dump chicken in South Africa because of a duty-free trade agreement. The United States is able to dump chicken in South Africa because it has imposed a huge annual quota free of the anti-dumping duties its actions have earned.
European poultry producers benefited hugely after the EU negotiated Economic Partnership Agreements (EPAs) around the world. Countries in Africa in particular found that these EPAs allowed duty-free entry of EU bone-in chicken into their countries. Local producers were thrown into crisis.
In Ghana, the poultry industry collapsed after its market share was reduced to 5%. Chicken imports caused huge problems in Cameroon, Senegal and Burkina Faso. In South Africa, production contracted, and thousands of jobs were lost.
Anti-dumping duties followed, and have helped to stem the imports tide. However, the biggest impact has arguably come from bird flu which has reduced production in the EU and the US. Dumping volumes are likely to increase as those markets recover from the virus.
South Africa currently has anti-dumping duties in force against bone-in chicken imports from nine countries – the US, the UK, Brazil and six EU countries – Germany, the Netherlands, Denmark, Ireland, Poland and Spain.
This shows that dumping remains a concern, even though the volume of dumping has lessened considerably as imports have declined with the worldwide spread of bird flu. A close eye is being kept on rising imports of bone-in chicken from Argentina.
All of this international action and reaction stems from the northern hemisphere preference for white chicken meat.
