Chinese Anti-Dumping Measures Against Poultry Imports
The Chinese Ministry of Commerce has enacted provisional anti-dumping measures on Brazilian chicken imports, mandating that importers pay deposits ranging between 18.8% and 38.4% to Chinese customs. The measures come after a nearly year-long investigation by the ministry, which determined that the import of Brazilian chicken negatively impacted Chinese producers between 2013 and 2016. Brazil is the world’s largest exporter of chicken, and until now, has supplied over 50% of China’s chicken imports. BRF SA, the largest Brazilian producer of chicken meat, has denounced the tariffs, stressing that the measures will hurt Brazil’s poultry industry. The company is still recovering from several challenges including: a ban on European imports imposed on leading Brazilian plants over food safety; the truckers’ strike in May which lead to the mass culling of 70 million chickens; and an increase in grain prices.
The Brazilian Association of Animal Proteins (ABPA) issued a statement denying the causal link between the exports of Brazilian poultry and the alleged injury, i.e., the negative impacts to Chinese local markets. The association claims these measures are counterproductive to the strong bilateral trade relations the countries have built over the past ten years. ABPA expects to work with Chinese authorities on reversing the imposition before the final measure is announced in August of this year.
The anti-dumping measures against Brazil come at a time when the US is pushing for China to reopen its market to US poultry imports. Currently, the US is Brazil’s largest poultry competitor, and China has served as the main market for US poultry exports. As the Brazilian poultry industry recovers from recent events, the US seeks to re-establish itself in China through ongoing trade negotiations. China’s Commerce Ministry removed anti-dumping and anti-subsidy duties imposed on U.S. white-feathered broiler chickens in February, but the 2015 ban on imports of U.S. poultry, poultry products, and eggs due to avian influenza remains in place. Thus, the removal of the tariffs first imposed in 2010 is largely inconsequential for the American poultry industry since the market remains closed, according to Sarah Li, director for Greater China at the USA Poultry and Egg Export Council in Hong Kong. In January, the industry association visited China’s Ministry of Agriculture and urged the government to repeal the import ban, which it considers no longer valid due to the absence of outbreaks of highly lethal forms of the virus, she said. American exports of poultry and eggs to China were worth hundreds of millions of dollars each year before the restrictions, and competed strongly with Brazilian exports.
The USA Poultry and Egg Export Council sees potential for the American poultry industry to re-establish itself by capitalizing on the chicken feet market, once trade bans are lifted. Chicken feet are served as a renowned national delicacy in China, whereas in the US these parts are sold as scrap to be turned into animal feed. Back in 2010, about half of the American chicken products exported to China were chicken feet.
The chicken feet market presents an opportunity for Brazilian exporters as well. Though some exports remain affected by the current anti-dumping measures, Brazilian exporters should still be competitive despite the impact of the deposits, particularly for chicken feet, which would otherwise have no value. According to Pan Chenjun, senior analyst at Rabobank, “China is not the most important market (for Brazil), but in value it’s quite important as it takes all the byproducts.” Although some importers are likely to negotiate with suppliers to share the deposit fees for chicken feet, this would be a fraud to the measure imposed by the Chinese government, and it is uncertain how the relevant authorities at Ministry of Commerce of the People’s Republic of China (Mofcom) would counter-react.
-Carolina Ures and Isabella Nunez