Exports Drop Dramatically
- By Karen Gentry
Associate Editor
The International Trade Commission’s (ITC) preliminary ruling on July 22, 1999 agreed that the U.S. apple industry was being economically injured by below-cost Chinese concentrate imports. Since then there were no imports of Chinese apple juice concentrate during the month of August, September’s imports decreased by 76%, October’s by 65% and November’s by 63%, compared to the same time one year earlier. On Nov. 16, 1999 the Commerce Department levied preliminary antidumping duties of 54.55% on most Chinese apple juice concentrate imports.
Kraig Naasz, CEO of the U.S. Apple Association (USApple) said the industry’s investment in the issue has paid off and growers are already reaping the benefits with an increase in prices. Prices for juice apples in the state of Washington have risen to $120 a ton, compared to a low of $10 per ton a year ago, according to Naasz.
The suit has helped increase prices for juice apples and helped create a stronger price structure for fresh apples. “The third impact may serve our industry’s interests longer. It demonstrated how successful our industry can be when we pool our resources to fight for our industry’s interests in Washington,” Naasz said.
The price for juice apples in Michigan has risen from 3.5 cents per pound to 4.5 cents, according to Tom Butler, manager of Michigan Processing Apple Growers division of MACMA. “Growers certainly can’t make money at these prices but at least the prices are getting out of the gutter,” Butler said. He said if the anti-dumping suit results in a favorable outcome it will stabilize the world market for juice concentrates at higher levels.
Butler said the Chinese are now selling concentrate at $6.50 per gallon where last year it went as low as $3.50 per gallon. He said European concentrate is now selling for over $7 a gallon, whereas last year it was $5 and less per gallon.
The U.S. Department of Commerce announced it will convene a hearing on March 17 to review final arguments and will issue its final decision on the case by April 6. Correspondingly, the U.S. International Trade Commission (ITC) will conduct a final hearing on April 10 regarding domestic industry injury, and will issue its final decision by May 22, according to USApple.
Commerce and ITC had planned to issue their final decisions by Jan. 31 and March 15 respectively, but granted a request by Chinese producers for an extension to prepare for the final hearing, and as a result rescheduled their final rulings.
Naasz said duties could go significantly higher. At the U.S. apple industry’s request, Commerce’s preliminary duties were assessed retroactively to Aug. 25, 1999. The preliminary duties will remain in place until both agencies issue their final ruling that will likely to remain in place for at least five years, according to Naasz.
Naasz said the Commerce Department identified 29 processing facilities in China and 10 of those firms are participating in the case, processors who can likely demonstrate that they were selling apple juice concentrate closer to the cost of production. “Their duties would be less than those given to other companies. That’s the incentive,” said Naasz. Commerce officials traveled to China to examine the records of these processors to ensure the response they filed could be traced back to all of their accounting records.
In response to some industry concern that China may be circumventing apple juice concentrate through other countries, Naasz said there has been no evidence of that. He said USApple is working closely with U.S. Customs Service to make sure product is not shipped from China to another country and then to the United States. Naasz said that should Chinese exports to any given country increase and that country’s exports increase to the United States, that country’s exports could be assessed the same level of duties as Chinese exports.
Naasz said the Commerce Department knows the capacity of the 10 Chinese processors participating in the anti-dumping suit. The higher duties would be imposed on them if their exports exceed their capacities. “U.S. Customs has been successfully prosecuting and enforcing dumping cases for decades,” Naasz said.
Chinese imports of concentrate increased by more than 1,200% between 1995 and 1998, from 3,000 metric tons to 40,000 metric tons. During that time the average price of Chinese concentrate imports declined by more than 53% from $7.65 per gallon in 1995 to $3.57 per gallon in 1998, while China’s share of the U.S. concentrate market increased from 1% in 1995 to 18% in 1998, according to USApple statistics.
Between 1995 and 1998 the average price for U.S.-made apple-juice concentrate fell by 50%, while the average price U.S. growers received for juice apples declined by 64% - from $153 per ton in 1995 to $55 per ton in 1998. The U.S. Department of Agriculture estimated apple growers lost more than $135 million in revenue between 1995 and 1998.
The dumping petition was prepared by the Coalition for Fair Apple-Juice Concentrate (FACT), comprised of state and regional apple associations, processors and concentrators. FACT, administered by USApple, received financial support from the Michigan, Pennsylvania, Virginia and Washington state departments of agriculture.
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