Why is bone-in chicken so important?

Dumped imports of frozen bone-in chicken portions – leg quarters, drumsticks, thighs and wings – have damaged the South African poultry industry for decades, because they compete unfairly with locally produced individually quick frozen (IQF) packs. IQF chicken is a substantial portion of the local market.

The reason for the damage is the unfairly low pricing of dumped imports.

Northern hemisphere consumers prefer chicken breast meat, so major producing countries – Brazil, the United States, Brazil and the European Union – get premium prices for white meat.

This makes the brown meat – bone-in chicken portions – an unwanted surplus. It is frozen and disposed of cheaply in bulk backs to markets such as South Africa, where chicken thighs and drumsticks are popular. Because they have made their money on the breast meat, they can dump the rest at prices way below their cost of production with which local producers cannot compete. This is a form of predatory trade practice that allows them to capture a large enough market share to gain pricing power.

This is unfair trade and has led to anti-dumping duties.

All of South Africa’s anti-dumping duties on chicken imports are for bone-in portions. Anti-dumping duties have been in place for imports from the US since 2000, and for Germany, the Netherlands and Britain since 2015. They should have been imposed on Brazil and four EU countries – Denmark, Ireland, Poland and Spain – last year, but Minister Patel decided to hold off 12 months.

Each anti-dumping investigation has shown that dumped chicken comes in at prices well below what it is sold for by producers in their domestic markets. The result in South Africa has been consolidation for big producers and closure for small businesses. Thousands of jobs have been lost.

The latest investigation, concerning Brazil and the four EU countries, was no different. It found that bone-in chicken imports from Brazil and EU countries had harmed the local industry and cost local jobs. What is more, Minister Patel agreed – before delaying the remedies that would have countered this unfair trade.

South African chicken producers are waiting to see whether Minister Patel will indeed impose those ani-dumping duties on Brazil and four EU countries in August. Chicken importers, who don’t want any curbs on their lucrative business, want a further delay. Local farmers are hoping that Minister Patel will come to their defence, at last.