FIFI PETERS: The South African Meat Importers and Exporters Association is describing the suspension of anti-dumping duties on chicken imports as a significant win for cash-strapped shoppers. The suspension of the tariffs primarily signifies that chickens that come from Brazil, Spain, Poland, Ireland, and Denmark can enter South Africa with out the extra value of paying the responsibility.
To inform us precisely how shoppers will profit I’m joined by Paul Matthew, the CEO of the South African Meat Importers and Exporters Association. Paul, thanks a lot in your time. You’re saying this can be a main win for me and the listeners, and for all different shoppers on the market who get pleasure from their chicken. How so? What is that this finally going to imply for the worth that we pay for chicken?
PAUL MATTHEW: Evening, Fifi. Yes, as a South African shopper I feel it’s an enormous win for us. But let me simply take a step again and clarify how this all works. Obviously there’s been an anti-dumping investigation on Brazil, Spain, Poland, Ireland and Denmark. What has occurred now’s that the minister has put a maintain on any tariffs or duties utilized to these international locations underneath the anti-dumping [regulation]. What we have to perceive, although, is that in March 2021 on all frozen bone-in chicken there was a 62% tariff that was utilized. So this anti-dumping tariff would’ve been over and above that 62%.
So what truly occurred? If you are taking the 62%, and let’s simply say there was an additional 17% anti-dumping responsibility, it means it takes it as much as 79%.
It signifies that the native producers can take their value leaving the manufacturing unit they usually can up this value by 79%.
That’s why we at all times struggle these functions, as a result of it simply permits safety [for] the native poultry guys to up their costs.
So what’s going to occur now’s that the South African shopper isn’t going to have this extra horrible tariff or responsibility utilized now for the subsequent 12 months. So we, as South African shoppers most undoubtedly ought to see – I emphasise ought to see – a discount in poultry costs.
FIFI PETERS: The phrase ‘should’ opens up room for doubt – it ought to, however may additionally not occur. So why use the phrase ‘should’ as an alternative of ‘will’?
PAUL MATTHEW: Fifi, I imply already the native producers, only a day after Minister Ebrahim Patel’s announcement, have [indicated] within the press that clearly there are infrastructure points across the electrical energy, there are points round water. And they’ve been saying for fairly a time now the problems across the Russia-Ukraine warfare and the availability of grain. So they’ve at all times obtained a problem to struggle authorities with, to justify the rise of their costs. So what I’m saying, and I exploit the phrase ‘should’, is theoretically we must always little question see a discount, however they’ve already began planting the seed, their narrative being there are different points and count on a rise in poultry [prices] – which is odd as a result of all of it simply comes again to the earnings and clearly earnings to the shareholders.
So it’s going to be very fascinating to see how the native producers react to this announcement and what they do over the subsequent couple of weeks to assist the South African shopper as a result of we want it. We’ll have a slight discount hopefully this month in gas, we actually want a discount within the protein that’s mostly bought by South Africans. Let’s see what they now carry to the get together.
FIFI PETERS: You’ve spoken concerning the anticipated advantages for shoppers. What may this imply for a few of your members?
PAUL MATTHEW: Well Fifi, our trade is struggling, so there’s not a lot of a profit for our members. If you simply take a look, ever for the reason that 62% tariff, the bone-in market that crammed the hole from the native market, which the native market couldn’t produce, is basically 37% down from 2020 to the top of 2021. And already the year-on-year comparability – between January 2022 and final 12 months to the top of June – on complete birds and on bone-in chicken is basically between 37% to twenty-eight% down.
So I actually don’t see the large profit for our members. Also understanding that Spain, Poland, Ireland and Denmark have been closed due to AI [Avian Influenza] or the entire of Europe is closed due to AI. So commerce is basically down. So as an trade we have now been struggling. It’s not solely in poultry – it’s been within the meat imports as properly. So it’s not in our favour in any respect.
FIFI PETERS: You talked about the truth that you’ll be watching fairly carefully how the native producers react to the suspension of the responsibility over the subsequent couple of weeks. So let’s speak about eventualities right here. Let’s speak about a situation wherein the anticipated decline in value doesn’t occur. What then are your subsequent steps?
PAUL MATTHEW: Well, I feel when it comes to our discussions with authorities on tariffs and together with ITAC [being] over, I feel as an affiliation, as an trade, we additionally need to get into the element of this investigation, as a result of I feel it’s time to point out the South African public that the native producers, all they do is search safety the entire time for his or her shareholders. One’s obtained to ask: is there any materials damage justification that the native poultry guys have been saying – that imports have been harming their enterprise, and has Minister Patel – as a result of as an trade we requested for a moratorium of three years on tariffs – has he simply used to kind of profit authorities when it comes to their message to the general public? So we’ll take a look into this in additional element, clearly, but it surely’s going to be fascinating to see what the native guys will do now when it comes to their message to authorities about searching for safety and, you watch, it’s going to be round infrastructure, value of electrical energy, the water lack – as a result of now they’ll’t play the import card as they often do.
FIFI PETERS: Just lastly, this suspension applies for 12 months – is that right?
PAUL MATTHEW: That is right. Yes.
FIFI PETERS: So what occurs after that?
PAUL MATTHEW: We want to take a look on the report that ITAC has offered to Minister Patel, after which we want to take a look what suggestions they’ve made when it comes to duties. But theoretically what would occur is that after 12 months … the minister will introduce these tariffs. But we’ll look into that and we’ll have to attend 12 months to see if this falls away – or if the native financial system hasn’t recovered in any respect, hopefully we are able to speak to Minister Patel for an extension on this. But we’ll have to have a look at that over the subsequent couple of months.
FIFI PETERS: All proper, Paul, thanks a lot in your time. Paul Matthew is the CEO of the South African Association of Meat Importers and Exporters.
We did attain out to Astral Foods for his or her take on the announcement of the suspension. I consider they weren’t accessible this night. Perhaps we are able to get their facet of the story within the coming days.