February, 1999
by Matt McCallum
Feeling the pressure of the impending antidumping petition, Chinese apple
juice concentrators have raised their prices for the second time in four
months. Other concentrate-producing countries including Argentina and Chile
are also reportedly considering if they want to support the U.S. action
against China.
“In any sort of antidumping case you can understand where there would
be a scenario where other foreign suppliers would support the domestic industry
to correct an unrealistic market situation they aren’t happy about
either,” said Julia Daly, U.S. Apple Association’s director of
communications. “You can make the case that some of the world concentrators
are also being injured by China’s tactics.”
Daly declined to say what countries were interested, but that other countries
could support the U.S. concentrate industry financially in the action, but
could not officially sign on to the process.
China has been feeling the impending pressure since November when it put
on a floor price which raised prices 15-30%. It decided to raise its floor
price again on February 1. Low acid will go from $700 a metric ton f.o.b.
China to $730 - a 4% increase. High acid will go from $750 a metric ton
f.o.b. China to $780 - a 5% increase.
Chinese concentrate had been selling for as little as $3.50 just a few months
ago. The new price will push the price for U.S. buyers, by the time they
pay for shipping, to $4.70 for low acid and $5 for high acid. Washington
juice is selling for $4 f.o.b., making one concentrate buyer to quip “are
they now going to file an antidumping suit against Washington state?.”
The U.S. industry has said it costs $7.50 just to produce a gallon of concentrate.
The U.S. apple industry is still lining up support of the antidumping suit
and trying to raise the estimated $1 million it will take to pay for the
action.
The Coalition for Fair Apple-Juice Concentrate Trade (FACT), which will
fund and direct the process of developing an antidumping petition, is taking
shape with the support of several prominent apple industry organizations.
USApple facilitated the formation of FACT, as directed in November, 1998
by its board of trustees following the recommendation of an industry task
force that investigated the feasibility of pursuing an antidumping case.
Several apple-juice processors and concentrators who have been harmed by
dumping have lined up in support of FACT and plan to file the antidumping
petition with the U.S. Department of Commerce.
Those industry organizations to have already endorsed the preparation and
filing of an antidumping case include the following:
• Michigan Apple Committee;
• Michigan Processing Apple Growers Association;
• Michigan State Horticultural Society;
• New York Apple Association;
• New York State Horticultural Society;
• Pennsylvania Apple Marketing Board;
• Washington Apple Commission.
• Washington State Horticultural Association.
In addition to these grower-based industry organizations, Tree Top, Selah,
Wash., and the Apple Processors Association (APA), Washington, D.C., have
both endorsed the coalition's formation and preparation of an antidumping
petition. APA’s members include Bowman Apple Products Co., Mount Jackson,
Va.; Knouse Foods Cooperative, Peach Glen, Pa.; and National Fruit Products
Co., Winchester, Va.
The Pennsylvania Department of Agriculture and the Washington State Department
of Agriculture have each awarded sizable grants to the apple industry to
conduct the research needed to demonstrate the adverse economic impact of
below-cost apple-juice concentrate imports. Still other state departments
of agriculture are actively considering the apple industry's request for
financial assistance in this regard.
According to U.S. Department of Commerce data, imports of apple juice concentrate
from the People's Republic of China increased 953% between 1995 and 1997,
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.
All four countries, as well as other foreign suppliers such as Italy, are
likely to be named in the antidumping petition.
Several U.S. apple-juice processing plants have been forced to cease operations
in recent months, 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.
U.S. apple growers are also suffering severe economic losses as their juice-apple
markets are being displaced by low-cost imported concentrate. According
to the U.S. Department of Agriculture (USDA), since 1995 growers have lost
nearly $92 million in revenue from a decline in juice-apple prices and reduced
demand for juice apples. Between 1995 and 1997, prices received by U.S.
growers for juice apples fell 39%, according to USDA statistics. Growers
received on average $153 per ton for 1995-crop juice apples, versus only
$93 per ton for 1997-crop apples. While official data aren't yet available
for 1998-crop apples, prices have fallen as low as $10 per ton in some parts
of the country, a 93% decline from 1995-crop prices.
The Fruit Growers
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