Itac mulls hold on chicken import duties

● The International Trade Administration Commission (Itac) has received 18 comments from across the poultry sector as it decides whether to place a temporary hold on import duties on chicken and related products as South Africa grapples with bird flu.

Itac commissioner Ayabonga Cawe said extensions were provided to specific stakeholders who requested them. The cut-off date for counter-comments was October

30.

“Once the commission has received all comments, it is envisaged that a special meeting may be convened at which oral representations may be received from value-chain participants in line with the requirements.”

Cawe said Itac would send a report with the consultation results to trade, industry & competition minister Ebrahim Patel. If Patel accepts the recommendations, he will ask the finance minister to implement the proposed amendment through a publication notice by the South African Revenue Service. Those affected by the Itac determination may appeal against it in the high court.

The government is embarking on multiple interventions to ensure food security and market supply as fears loom that the bird flu outbreak will last more than a year.

The general manager of the Broiler Organisation at the South African Poultry Association (Sapa), Izaak Breitenbach, told Business Times that a rebate on poultry imports, on top of load-shedding and other operational challenges, would devastate local poultry producers.

“Sapa is opposing the imposition of a rebate on anti-dumping duties and the MFN [most-favoured nation] duty. The information submitted will show that the total shortage of chicken meat created by culling flocks will be mitigated by the actions taken.”

Breitenbach said producers have taken various actions to increase egg production by extending the lifespans of flocks on the ground and setting reject eggs and eggs from young flocks.

“But the big action is the importation of 63-million hatching eggs that will arrive during the shortages expected in the next three months. The volume of eggs to be imported increases by the day to address shortages in the market.

“Sapa has also argued that a rebate will do material harm to the industry. In the antidumping applications, Itac found that dumping does take place and it causes material harm to the industry,” Breitenbach said.

He said the industry has been in a loss situation since January and the government has not reimbursed the producers for flocks culled. Now a rebate on tariffs will cause the industry to compete with a dumped product, he warned.

The CEO of the Association of Meat Importers & Exporters, Paul Matthew, said the association had proposed to Itac that it reduce import duties on frozen bone-in chicken from 62% to 37% for 12 months, reduce duties on boneless chicken from 42% to 12%, and zero-rate chicken offal.

“The temporary rebate will help mitigate the supply shortage in households, particularly poor households that are increasingly vulnerable to food insecurity. Reducing the duties will allow chicken to be imported at an affordable price while providing the local industry time to recover from the recent outbreaks,” he said.

Since 2017, there have been 369 bird flu outbreaks across the country, and this challenge requires the collaboration of the government, local producers and importers to save the poultry sector, as well as ensure food security and public health, said Matthew. “While a 12-month rebate helps alleviate shortages and temper prices, we believe Itac should also consider a responsive rebate permit mechanism that can be quickly activated when needed, without the need for time-consuming processes and delays.”

Department of agriculture, land reform & rural development spokesperson Reggie Ngcobo said the department had introduced measures to contain the outbreak, including allowing the importation of table eggs, fertilised eggs and poultry meat, to ensure stocks are available in time for the Christmas holiday season.

Ngcobo said that since September the department had granted 115 permits for fertiliser eggs, 48 permits for egg powder, 2,406 permits for poultry meat and 24 permits for table eggs.

It was now considering a permit for a shipping container of 10,000t, he said. The interventions have allowed 34,511t of poultry meat to be imported, along with 1.9million hatchling eggs and 5,840 day-old chicks.