South Africa will need to wait another month before it knows whether tariffs on chickens imported to the country will increase by as much as 300%.
The International Trade Administration Commission of South Africa (Itac) met on Tuesday to hear an application by the South African Poultry Association for stiff tariff increases to be imposed on all chickens being brought into the country for resale.
The poultry association is proposing that the current duty of 27% on whole birds be increased to a maximum of 82%, or R11.11 per kilogram. Duties on bone-in portions are proposed to increase from R2.20 per kilogram to R6.53 per kilogram, almost three times the existing amount.
The commission, which said it heard and considered both written and verbal submissions on Tuesday, determined that it needed more time before making a final decision. This has accordingly been postponed until the commission's next meeting on July 9.
The application has been vehemently opposed by the Association of Meat Importers and Exporters (AMIE), which says that the tariff increases will cause chicken prices to go up by between 30% and 50% at the tills.
"We are genuinely fearful that South African consumers are going to be facing heavy increases on the price of chicken," AMIE chief executive David Wolpert told the Mail & Guardian in an April interview on the subject.
Also opposing the poultry association's action are food distribution company Merlog foods and South African retailer Boxer.
Pressures for local farmers
But Kevin Lovell, the poultry association's chief executive, said that price hikes were needed for South Africa's chicken suppliers to survive in an environment where farmers are facing mounting costs and a rising number of cheap imports.
"Local producers are eating cash at present. They need to increase prices or close up shop," he said. Overseas suppliers were dumping dark meat products on the South African market while retaining the white meat for their own local markets, he said.
Rainbow Chicken, the country's largest chicken producer, said in its 2012 financials that there was a "glut" of chicken in the market. The oversupply meant that "the pricing of chicken in retail bears no reference to its cost of production", it said.
The most recent South African Revenue Service (Sars) statistics pitch chicken imports at about 20%, but AMIE argues that it is closer to 10% and that the chicken import market bears little threat to local producers.
AMIE has brought a separate court application against the commission in a bid to gain access to non-public information in its tariff investigation. The hearing will take place in the North Gauteng High Court on June 18.
"If we win the case next week, it will delay the whole recommendation process anyway," said Wolpert.
Anti-dumping
This is not the first battle in the chicken tariff war. A previous application was made to ITAC for anti-dumping duties to be imposed on imports from Brazil, which accounts for about 50% of the South Africa's chicken imports.
In December, the Minister of Trade and Industry Rob Davies decided against imposing duties on the country in isolation, and instead said there was scope to raise general tariffs for shipments, according to Business Day.
South Africa imposed additional anti-dumping duties of up to 63% between February and August last year on some chicken imports from its Latin American Brics partner. – Additional reporting by Bloomberg