Brazilian chicken companies have jointly requested that the Brazilian government initiate a World Trade Organization (WTO) dispute-settlement case against the South African government’s decision to apply anti-dumping duties on Brazilian chicken, according to this week’s “International Egg and Poultry Review” from AMS Poultry Programs. The Brazilian chicken industry said South Africa’s decision does not comply with WTO rules because, when South Africa compared prices, it did not take into account taxes (16.5 percent) on domestic products.  Exported product is not taxed.

On January 30, 2012, the International Trade Administration Commission (ITAC) of South Africa released its report with a preliminary determination that dumping of Brazilian whole chickens and boneless cuts was taking place. The commission made a determination that the South African Customs Union (South Africa, Botswana, Lesotho, Namilar, and Swaziland) industry was suffering material injury and that the material injury was causally linked to the dumped imports from Brazil.  The ITAC initiated the investigation in June 2011. The investigation period for dumping was from January 1, 2010 to December 31, 2010.  The injury investigation involved evaluation of data for the period January 1, 2008 to December 31, 2010.

The residual margin of dumping was determined by the ITAC to be 62.93 percent for the whole bird and 46.59 percent for boneless cuts. The anti-dumping duties will be charged for six months. South Africa was the seventh largest market for Brazilian broiler exports in 2011 with shipments of 195,416 metric tons.

The AMS report noted that in a similar action South Africa assigned an anti-dumping duty against the United States for poultry products (bone in cuts, including chicken leg quarters) in 2000 for five years.  As a result, total U.S. poultry meat exports to South Africa were reduced from 24,700 tons in 1999 to only 374 tons in 2004. Anti-dumping tariffs, ranging from R2.24 per kilogram to R6.96 per kilogram are currently imposed in addition to an import duty of R2.20 per kilogram, effectively pricing U.S. chicken pieces out of the local market. A South African rand is worth about U.S. 13 cents.

U.S. poultry exporters applied to have the anti-dumping ruling reviewed in 2005, but the South African Poultry Industry opposed the application and the anti-dumping duty was extended to 2011, the report said.