China slaps anti-dumping deposit on Brazilian chicken

June 10, 2018

China will impose temporary anti-dumping measures on imports of Brazilian chicken meat, at the same time as the United States pressures Beijing to reopen its market to American poultry products. Chinese importers of Brazilian chicken will be required to pay deposits ranging from 18.8 per cent to 38.4 per cent of the value of their shipments from June 9, the commerce ministry said in a statement. A preliminary ruling from the ministry found that Chinese producers had been “substantially damaged” by shipments from Brazil between 2013 and 2016, when the country supplied more than half of China’s imports of chicken meat.
The anti-dumping measures are another blow to Brazilian meatpackers, who are still recovering from a food safety scandal last year and a May truckers’ protest that forced farms to cull some 70 million chickens due to a lack of feed.
They also show how third-party countries like Brazil, the world’s largest chicken exporter, could become collateral damage as the United States and China look for ways to head off a trade war.
Although the Chinese government calls the measures “deposits”, which in theory could be returned in the future, a source in the Brazilian meat industry, who asked for anonymity due to the sensitivity of the issue, said that in practice nobody ever manages to get them back.
The Brazilian government said it regretted the measures, adding it had followed the anti-dumping investigation all along and found no basis for the Chinese move.
In a statement, it said it hopes China will scrap the provisional punitive measures once the probe is finished.
Shares of Brazil’s BRF SA, the world’s biggest chicken exporter, closed 7.5 per cent lower at 21.50 reais.
Rival JBS SA, whose US poultry unit Pilgrims Pride Corp is larger than its Brazilian division Seara, rose 4.1 per cent. BRF and JBS declined to comment immediately on the matter.
Brazilian protein industry group ABPA denied any causal link between the chicken shipments and any harm to Chinese producers, calling the anti-dumping measures a step backwards in the countries’ strong bilateral trade relations.
The measure comes one year after China had implemented anti-dumping measures against another leading Brazilian commodity.
In May last year the Chinese government imposed hefty penalties on sugar imports.
Brazil used to be the largest exporter of sugar to China, but after the measure shipments were expected to fall by as much as 800,000 tonnes per year.
While the initial result of a probe on poultry imports that started last August had been expected this month, China’s move on Brazilian chicken appears as the United States pushes to recover access to the Chinese poultry market amid ongoing trade talks.
China has agreed to increase its imports of American farm goods in recent negotiations aimed at averting a trade war between the top two trading countries.
About 9 per cent of Brazil’s chicken exports went to China last year, according to ABPA, which said the flows were likely to be maintained due to strong Chinese demand.