South Africa should scrap all trade-related tariffs on chicken, introduce a three-year moratorium on new duties and remove value-added tax on the protein to ease pressure on food costs, according to a group that represents importers and exporters of poultry, beef and pork.
The removal of tariffs alone could translate into a 33% decrease in prices of bone-in chicken pieces and a drop of as much as 20% on chicken offal, Paul Matthew, chief executive officer of the South African Association of Meat Importers and Exporters, said in an online briefing on Monday.
While chicken is the most affordable source of protein in South Africa, a steady increase in costs partly due to duties, the impact of Russia’s invasion of Ukraine on the value of feed and food security combined with increases in domestic transport and electricity dues means the country is “facing a chicken-price tsunami,” he said.
The average of price of chicken increased by about 10% annually over the past decade, according to the association. While it hasn’t formally presented its proposal to the government, the National Treasury’s recent decisions to temporarily reduce a levy on fuel prices and delay an increase in duties on sugar-sweetened drinks could pave the way for intervention in the chicken market, Matthew said.
Tariffs are an important component of South Africa’s so-called masterplan to protect local producers from a flood of cheap shipments and save jobs in an industry that employs about 100 000 people. The government drew ire from trading partners such as the U.S. in March 2020, when it raised duties on frozen bone-in and boneless chicken pieces to 62% and 42% respectively. It also imposed provisional anti-dumping levies of as much as 265% on nations including Brazil in December.