OPINION: Brazilian chicken producers are running scared
Francois Baird, Opinion, Business Report (S.Africa)
10 April 2019
JOHANNESBURG - Brazil must be really worried that higher duties are about to halt the flood of chicken imports that are harming the South African chicken industry, its workers and surrounding communities.
In the last few days, three Brazilian officials have similarly worded comments in different South African publications. They attack the application by the SA Poultry Association (Sapa) for higher tariffs on Brazilian chicken and deny that Brazil dumps its product in South Africa.
Brazilian producers accuse the local industry of lies, slander and disinformation. They profess nothing but love for this country and its consumers.
This concerted Brazilian response is interesting, because the tariff application does not specify Brazil, nor does it accuse Brazil of dumping chicken (although the local industry and FairPlay believe it probably does). The application is on behalf of Southern African Customs Union (Sacu) countries and seeks higher tariffs on chicken imports from non-EU trade groups.
One of these groups, South America’s Mercosur, happens to include Brazil.
Extensive reasons, including a surge of imports and harm done to the local industry and its jobs, are given for the application to increase tariffs to 82percent on bone-in portions (currently 12percent) and boneless cuts (currently 37percent). The application, relating to these two categories only and not to all chicken imports, is being considered by South Africa’s International Trade Administration Commission (Itac).
Brazil has reacted fiercely to the application. In January the Brazilian Animal Protein Association warned that South African consumers would pay for higher tariffs; this month the association changed its tune and said the tariffs would halt Brazilian imports “as it will render most imports unfeasible”.
This is clearly the real fear - a halt to what has become a rapidly increasing flood of Brazilian chicken imports, particularly in the last two years after bird flu bans stopped most European Union exports.
Brazilian producers have more than filled the gap left by the absence of EU chicken, ensuring that 2018 was another record year for chicken imports - to the despair of the local industry, which has been appealing for tariff protection.
Brazil now supplies more than 60percent of South Africa’s chicken imports.
Brazil and the EU have targeted the South African market for the same reason. Their producers make their profits from selling chicken breast meat at premium prices in northern hemisphere markets. This leaves them with huge surpluses of “dark meat” - mainly leg quarters - which they freeze and sell off in bulk at any price they can get...