Mexico Postpones Chicken-leg Import Duties

The Mexican government said it is postponing the imposition of antidumping duties on imports of chicken parts from the U.S. because the recent outbreak of bird flu in the Mexican state of Jalisco has distorted prices in the domestic market.

In a ruling published Monday in the Official Gazette, the Economy Ministry confirmed duties of 25.7% and 127.5% for imports into Mexico of chicken legs and thighs, which it determined had been brought into the country under dumping conditions between 2007 and 2010, hurting local producers.

The Mexican government said it is postponing the imposition of antidumping duties on imports of chicken parts from the U.S. because the recent outbreak of bird flu in the Mexican state of Jalisco, Tyson Foods Inc. and Pilgrim's Pride Corp., and the higher duty to all other exporters.

The ministry said the application of the duties will be postponed, however, until conditions in the domestic market resulting from the outbreak of H7N3 bird flu are normalized.

The outbreak of the avian flu in Jalisco, which led to the slaughter of millions of chickens, pushed up prices of eggs and to a lesser extent chicken, contributing to higher-than-expected inflation in late June and early July.

Industrias Bachoco SAB (IBA, BACHOCO.MX), which was among the Mexican producers that filed the initial complaint, said it and other plaintiffs don't agree with the decision to not apply the duties until further notice.

Bachoco argued in a statement that the bird flu was contained and didn't affect chicken producers, that the duties applied only to chicken legs and thighs imported from the U.S. and that more than 80% of the chicken sold by Mexican producers, mainly as whole chicken, won't be subject to the duties.