Call for higher customs duties on frozen vegetables imported from EU and China
Frozen vegetable manufacturer, Nature’s Garden, has filed an application to increase the rate of customs duty on “mixtures of frozen vegetables” from 10% to 37%.
According to Nature’s Garden CEO, Bruce Sanday, the application submitted to the International Trade Administration Commission (ITAC) and the Department of Trade and Industry (DTI) recently, stated that low-cost imports from China and the EU were undercutting prices of locally grown and produced frozen vegetable mixtures. These included various combinations of vegetables including peas, carrots, corn, beans, broccoli and cauliflower.
Sanday said more supermarket retailers were opting to import the cheaper frozen vegetables for their house brands.
“In the past three years, the industry has seen an increase of about 21% in the volume of frozen mixtures of vegetables that are imported from the EU [46% increase for the period] and China [12% for the period].
‘ low- cost imports are undercutting local products’
“The EU is able to produce large amounts of good-quality frozen vegetables because they have economies of scale and support from government subsidies. China has relatively cheaper crops, but lower quality,” he said.
If this trend continued, there would be limited scope for the local industry, which would negatively affect farming and employment.
“Already an estimated 550ha [amounting to about R80 million to R100 million losses for local farmers] of irrigated crops are not planted in South Africa due to products being imported.”
The total market at risk to imports is estimated to be 2 500ha of irrigated land, or R400 million in losses to local farmers.
Sanday said the company would like the tariff to be amended, as a normal increase in duties would not impact products imported from the EU. This is because the economic partnership agreement that is in place prevents increases in duties on products from the EU. “We requested that a bilateral safeguard duty [be imposed],” he said. – Siyanda Sishuba