The anti-dumping tariffs on French fries placed on three European countries by the International Trade Administration Commission of South Africa (Itac) have lapsed, which will bring relief to consumers, says frozen food importer Hume International.
Itac placed anti-dumping tariffs as high as 181.05% on Germany, 104.52% on the Netherlands, and 23.06% on Belgium in July for a period of sixth months.
“The news comes as a small, but much needed, reprieve for the food industry during a period marred by continued global supply chain disruptions, rising animal feed costs, record high fuel prices impacting on transportation costs and increased loadshedding, which may lead to shortages of certain local food products,” the importer says.
Low-income households in South Africa have been hit the hardest by rising prices. Households are currently spending on average 13.5%, or about R580, more on food a month than a year ago, according to the Household Affordability Index for December, the company points out.
This is especially concerning considering that an estimated 55% of South Africans live below the upper-bound poverty line and cannot afford increases in expenses.
“We need to do everything in our power to bring prices down, which includes doing away with unnecessarily heavy duties. Competition is integral to an economy’s ongoing welfare, and our food industry benefits greatly from global trade which serves to fill shortages in the market and keep prices stable,” says Hume International MD Fred Hume.
Hume International continues to call on government to temporarily suspend trade duties on staple food products and previously inexpensive sources of protein, such as chicken, until local producers manage to catch up with demand.
Combined with increased investment in local production to help producers better compete with importers and the relaxing of strict port regulations, these efforts could bring South Africa back from the edge, the company says.
“This [lapsing of anti-dumping duties] is but one small victory in the ongoing fight against food price inflation and, if the average South African is to survive the year, we need to implement more substantial measures,” Hume adds.
Further, imports of French fries have decreased by one-third, largely owing to the high import tariffs placed on three major trading partners. Germany, which previously only made up about 6% of total imports and had very little impact on local prices, has largely stopped exporting fries to South Africa as a result.
“The simple fact of the matter is that, while the local industry produces sufficient amounts of potatoes to meet consumer demand, the same cannot be said for the specific variant used to make French fries, and hence our reliance on imports,” Hume says.