Itac recommends increased customs duty on imported peanut butter
The International Trade Administration Commission of South Africa (Itac) has recommended an increase in the customs duty on imported peanut butter. This followed an investigation triggered by an application submitted by RCL Group Services. Itac’s recommendation was that the current duty of R0.99/kg be replaced by a duty of 25% ad valorem.
During its investigation, Itac found that domestic production of peanut butter, sales volumes and utilisation of capacity had all declined, while imports (predominantly from India) had seen a major increase. South African producers saw their production costs increase as a result of higher costs for raw materials, labour and operations, putting them at a persistent disadvantage, price-wise, compared with imported peanut butter.
As a result, Itac recommended the increase in customs duty on peanut butter, as this would provide a better balance between support for local manufacturing, promoting value addition and ensuring continued affordability for consumers.
“The Commission also found that a temporary rebate provision on imported groundnuts could reduce input costs for domestic processors and complement any increase in customs duty by improving the competitiveness of local manufacturers,” reported Itac.
Consequently, in terms of the International Trade Administration Act 2002’s Section 16(1)(d)(ii), the Commission would self-initiate an investigation into establishing a temporary rebate provision for the import of groundnuts. “The investigation will assess the feasibility of establishing a rebate mechanism to improve the competitiveness of domestic peanut butter manufacturers through lower input costs.”
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