The International Trade Administration Commission of SA (Itac) has initiated a probe into the alleged dumping of active yeasts imported from Zimbabwe.
This comes after SA’s only producer of the product, Rymco, which trades as Anchor Yeast, alleged that bakers’ compressed yeast is being dumped on the Southern African Customs Union (Sacu) market by a Zimbabwean exporter and causing material injury, threatening the survival of the sector.
Cream, compressed and instant yeast are used for commercial baking and alcohol fermentation.
Durban-based Anchor Yeast has been producing yeast in SA since 1923, and was taken over in 2006 by global private group Lallemand, which specialises in the development, production and marketing of yeast, bacteria and speciality ingredients.
The allegation of dumping is based on a comparison between the normal value of the product and the export price.
Comparing the normal value of the product in Zimbabwe as per a cash sales invoice obtained from a producer in Zimbabwe (the French food company Lesaffre) with the export price of yeast as per SA Revenue Service data, Itac said the applicant had shown there was prima facie proof of dumping.
Itac is the authority responsible for trade remedies in SA.
To show material injury, Itac said the applicant had supplied information indicating a drop in sales in the period January 2020 to December 2022.
This was coupled with a loss of market share and falling profits, production, cash flow and employment, which hampered overall growth.
Anchor Yeast submitted information showing a significant increase in dumped imports on the Sacu market, which indicated the “likelihood of substantially increased importation and that the [product] is entering the Sacu market at prices which undercut the Sacu manufacturer’s prices that will have a depressing and suppressing effect on prices and are likely to increase the demand for further imports”.
Anchor Yeast is the only producer of the product in Sacu and so, according to Itac, constitutes 100% of the region’s domestic production of compressed yeast.
Sufficient evidence
“The applicant submitted sufficient evidence and established a prima facie case to enable the commission to arrive at a reasonable conclusion that an investigation should be initiated on the basis of dumping, material injury, threat of material injury and causality,” Itac said in the Government Gazette of August 18.
Itac indicated that the period for investigation to determine the dumping margin will be from January 1 2022 to December 31 2022. The period for investigation to determine material injury will be from January 1 2020 to December 31 2022.
“The commission has begun an investigation in terms of section 16 of the International Trade Administration Act, 2002,” Itac said.
It will be giving due regard to the World Trade Organization Agreement on implementation of article VI of the General Agreement on Tariffs and Trade, 1994, Itac said.
SA and Zimbabwe have a bilateral trade agreement dating from 1964, which provides preferential access to certain agricultural products and manufactured goods such as textiles and clothing that conform to the agreed rules of origin requirements. However, dumping practices are still considered anticompetitive and are frowned on.
As it starts its investigation Itac said that it will send nonconfidential versions of the application and questionnaires to all known importers and exporters and known representative associations, but called for importers and other interested parties to contact it with any information necessary for its investigation.
It cautioned that information submitted by any party may need to be verified by the investigating officers for the commission to take such information into consideration.
Anchor Yeast was forced to temporarily stop the sale of its brewers’ “Inkunzi malanga” dry yeast after it gained traction among people making home-brewed beer amid liquor bans put in place by the government during the height of the Covid-19 pandemic.
Compressed yeast has a large market in baked goods, particularly in brown bread — a zero-rated food in SA which does not have VAT added to its selling price — which is a source of fibre for many South Africans amid rising food inflation.
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