The International Trade Administration Commission of South Africa (ITAC) announced a decision to increase the customs duty on imported peanut butter from 0.99 cents per kilogram to 20% following an investigation.
This decision was made amid growing pressure on local peanut butter producers, who are facing increased imports, rising production costs, and declining sales. The ITAC recommendation followed a submission by RCL Group Services (Pty) Ltd, which requested a tariff increase to 25%.
The ITAC investigation revealed that volumes of domestic production, sales, and capacity utilization have decreased, while imports have significantly increased. According to the commission's data, India remains the main source of imported peanut butter, creating constant price disadvantages for local producers compared to imported goods.
The commission also noted that rising costs for raw materials, labor, and operations are putting pressure on domestic manufacturers. However, the commission stated that a temporary preferential measure on imported peanuts could lower input costs for domestic processors and enhance the competitiveness of local producers, offsetting potential increases in customs duties.
Consequently, ITAC recommended raising the overall customs duty rate on peanut butter from 0.99 cents per kg to 20% ad valorem to find a more suitable balance between supporting domestic production, stimulating added value, and maintaining consumer affordability.
Furthermore, the commission decided to independently initiate an investigation into establishing a temporary preferential quota for peanuts. This investigation will assess the possibility of implementing a discount mechanism to boost the competitiveness of local peanut butter producers by reducing raw material costs.
