China re-imposes anti-dumping duties on US chicken

By Mark Godfrey

- Last updated on GMT

Related tags: Poultry meat imports, Meat, Us

Tyson Foods and Pilgrim's Pride are among the companies to be hit by the levy
Tyson Foods and Pilgrim's Pride are among the companies to be hit by the levy
US white-feather chicken meat imported into China will face “anti-subsidy duties” for five more years, China’s ministry of commerce has announced. 

Under the order – which comes into force on 30 August and renews duties first imposed in 2010 – China will levy between 4% and 4.2% on US poultry firms shipping into China.

The ministry’s statement lists 36 affected firms, 34 of which will see their goods levied at 4.1%. The exceptions are Tyson Foods, which will pay 4.2%, and Keystone Foods which will have the lowest levy at 4%. Those on the 4.1% rate include Sanderson Farms, Pilgrim’s Pride Corp, Koch Foods and Case Farms.

American poultry meat imports into China have sharply undercut local prices, according to a separate statement from the government-funded China Animal Husbandry Association (CAHA), which provides data supporting the duties. The CAHA made submissions to the ministry of commerce on behalf of Chinese poultry producers, according to the ministry’s statement, which also quotes from parts of the US Farm Bill to prove that America subsidises its poultry sector.

Price gaps

US imports grew from a 0.58% share of China’s chicken meat market in 2011 to a massive 57.3% share in 2013, before the figure declined slightly to 40.6% in 2014, according to the CAHA data.
The price gap between US imports and domestic produce is also stark. The average price per ton for imported American chicken feet in 2011 was RMB8,997.3 (£1,000) compared to an average RMB13,757 (£1,562) per ton for domestic product in that year. In 2014 the spread widened to RMB7,708.4 (£875) per ton for US and RMB13,389 (£1,520) per ton for local Chinese chicken feet.

For chicken legs, the 2011 price for US imports was RMB10,049 (£1,142) per ton compared to RMB14,542 (£1,641) for Chinese produce, which fell to RMB7,612 (£865) per ton and RMB12,447 (£1,414) per ton respectively in 2014.

The price differential is more dramatic in chicken wings: RMB8,249.9 (£940) per ton compared to RMB20,192.17 (£2,293) ton in 2011 and RMB8,250.85 (£936.4) per ton compared to RMB20,062.19 (£2,277) per ton in 2014.

Fast-growing meat

While the Chinese ministry of commerce claims that US chicken is being dumped on the Chinese markets, China also supports its poultry producers at both a national and local government level. Although some US firms like Tyson and OSI have made much progress in selling imported and locally produced poultry, there is an ongoing consolidation of the domestic sector driving the emergence of giants like Fujian Sunner Development, Shandong Xinchang Group and Henan Huaying Agricultural Development.

Chicken is the fastest-growing protein in overall consumption terms in China and accounts for nearly a fifth of total meat consumption. China’s broiler meat consumption will stay largely flat in 2016 at 12.8m tons, according to projections from the US department of agriculture, which also puts broiler meat imports at 200 thousand tons, down 7% year-on-year.

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