May, 1999
Apple juice concentrate dumping suit to be filed in May
by Matt McCallum
The apple juice antidumping petition is taking a little longer to put together than anticipated, but the extra time is adding strength to the effort.
The U.S. apple industry was hoping to file an antidumping petition against apple juice concentrators in China, Hungary and Argentina 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.
USApple President Kraig Naasz said it has taken longer to pull together the information than first anticipated. Part of this is because more processors have lined up to join the suit. The attorneys putting the petition together must figure the cost of production for apple juice concentrate in the U.S. The more processors who join, the more information they have to collection and calculate.
"The good news is the suit will be stronger because of their support," Naasz said. "Our number one goal is to file the strongest case we can put forward. The second goal is to do it as quickly as possible so we can bring remedies to bear in time for the coming apple crop."
The extra time has also meant more funding for the suit that could cost over $1 million. If the suit is successful duties and/or quotas could be slapped on the three countries by fall.
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.
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.
