March, 1999
by Matt McCallum
The U.S. apple industry has come to the table with enough money to file an antidumping petition against apple juice concentrators in China, Hungary and Argentina.
The petition will be filed in mid-March on behalf of several apple juice processors and concentrators who have been harmed by the dumping. The Coalition for Fair Apple Juice Concentrate Trade (FACT) is funding and directing the process. The U.S. Apple Association facilitated the formation of FACT.
If the suit is successful duties and/or quotas could be slapped on the three countries by mid-August or September, said USApple President Kraig Naasz.
"Chances are better than 80% that the case will succeed," he said.
China hasn’t been successful in two antidumping suits brought by U.S. commodity groups in the last five years. In 1994 the U.S. government was about to slap an average tariff of 144% on Chinese honey exporters, but the Chinese decided to negotiate a settlement and agreed to quotas and floor prices. The U.S. canned mushroom industry won its case several months ago and Chinese canned mushroom producers were slapped with duties ranging from 168% to 198%.
Chinese apple juice concentrators know their odds aren’t good and have been raising the floor price since last fall to try and stave off the suit.
In November Chinese concentrate was selling for as low as $3.50 a gallon f.o.b. The most recent increase came in February and will push the price for U.S. buyers to $5 a gallon f.o.b. for low acid and $5.25 for high acid. The U.S. industry has said it costs $7.50 just to produce a gallon of concentrate.
China’s price increase won’t help because the Department of Commerce will go back three years of pricing, Naasz said. The DOC will look at prices starting in the last full quarter, which means it will look at prices from December 1998 back. Prices in 1999 won’t be a part of the equation. And if the DOC believes concentrators were trying to push in large amounts of concentrate before a final dumping determination is made, it can make duties retroactive 90 days.
Apple juice concentrate prices hit record lows last year due to the explosion of cheap Chinese concentrate imports into the U.S. over the last few years. Between 1995 and 1997 apple juice concentrate from the communist country increased 953%, while the price for Chinese concentrate fell by 53%. During the same time, Hungarian imports increased 133%, while the price for Hungarian apple juice concentrate fell 53%. Other countries, such as Chile and Argentina, also lowered their prices by 31% and 39% respectively, presumably in an effort to maintain their share of the American market against lower-priced competition.
The suit is good news to U.S. apple growers who’ve seen the floor price of apple pricing drop out because juice apple pricing determines where other prices are set. Since 1995 growers have lost nearly $92 million in revenue from a decline in juice apple prices and reduced demand for juice apples, according to the U.S. Department of Agriculture (USDA).
Several U.S. apple juice processing plants have been forced to cease operations in the last year, including plants in North Carolina and New York. Still others are teetering on the brink of bankruptcy as a consequence of being forced to compete against the flood of cheap apple juice concentrate imports entering the U.S., according to the USApple.
The Fruit Growers News