Chicken Producers Jump on Brazil Import Tax: Johannesburg Mover
Country Bird Holdings Ltd. (CBH) rallied to a four-year high and Astral Foods Ltd. (ARL) gained the most in more than nine months after South Africa imposed higher charges on poultry imports from Brazil to protect local suppliers.
Country Bird surged as much as 11 percent to 5.60 rand and closed 4 percent higher at 5.25 rand in Johannesburg, the strongest since January 2008. Astral climbed 2.5 percent, the most since April, to 125.20 rand.
Import charges of 6 percent to 63 percent will be imposed for six months, as initial information shows Brazilian producers are dumping products in South Africa, Francois Dubbelman of Pretoria-based FC Dubbelman and Associates, which represents local producers, said by phone from Pretoria today. Astral is South Africa’s biggest chicken producer by market value.
“We weren’t expecting such a favourable outcome,” Sumil Seeraj, an analyst at Standard Bank Group Ltd.’s SBG Securities, said in a phone interview from Johannesburg. “It won’t be profitable for the importers to bring in imports with the higher tariff.”
Brazilian imports have risen to about 15 percent of the total poultry market in South Africa, leading to an oversupply of South Africa’s preferred source of protein, Seeraj said. Reducing imports from the South American country may help South African producers realise better prices for their chickens, he said.
The duties will be in place until Aug. 10, by which time South Africa’s International Trade Administration Commission is scheduled to have completed the investigation and made a final decision, Dubbelman said.
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