S. Africa May Refund Chicken Duties If Charges Unclear

(Correct’s Dubbelman’s title in first paragraph. The Story was first published on Aug. 8.)

South African poultry importers bringing the meat in from Brazil stand to get a refund of temporary tariffs unless final duties are imposed this week and exceed the current charges, consultant Francois Dubbelman said.

The International Trade Administration Commission of South Africa, which calculated the initial tariffs of as much as 63 percent on certain cuts, has presented Trade Minister Rob Davies with a final report on its investigation on the imports, ITAC said in an e-mailed reponse to questions on Aug. 2. The deadline for the final tariffs is Aug. 10, Pretoria-based ITAC said in February.

“If these final duties are not imposed on Friday, then importers will be refunded their money for the past six months,” Dubbelman, who is representing the South African Poultry Association, said by phone today from Pretoria. “This will have a bad effect on South Africa’s poultry industry. It will mean importers can continue with what they are doing.”

South Africa imposed the duties after initial information showed Brazilian producers were dumping products in the continent’s biggest economy. The local price of yellow corn, mainly used as animal feed, has surged 42 percent in the past three years. Poultry imports have increased to a record and chicken prices are the same as four years ago, according to Astral Foods Ltd. (ARL), the country’s second-biggest chicken producer.

Brazil in June filed a dispute against South Africa with the World Trade Organization over the taxes it has to pay.

The South American producers include BRF Brasil Foods SA (BRFS3), the world’s biggest poultry exporter, and Seara Alimentos, the pork and poultry unit of Marfrig Alimentos SA (MRFG3), Latin America’s second-largest producer of beef.

Final Duties

“There is too much chicken floating around in South Africa, so there’s a depressed market and the prices are unnaturally low,” Kevin Lovell, CEO of the South African Poultry Association, said by phone yesterday. “I would say that most of the companies are either running at a loss or very close to doing that at present with the current pricing levels.”

If the final duties exceed the current provisional tariff, importers won’t have to pay the difference, they will only start paying the new higher duty, Dubbelman said. “However, if it is lower than what they currently pay, they will have to be refunded the difference.”

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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