Sep 12, 2005

Commerce Sees Need for Chinese Concentrate Antidumping Order

The U.S. Department of Commerce said in early September that Chinese apple juice concentrate exporters are expected to sell product at unfair prices in the United States if the current apple juice concentrate antidumping order is revoked.

The decision, based in part on information submitted by the U.S. Apple Association (USApple), is the first step in continuing import duties on non-frozen apple juice concentrate (NFAJC) from China.

Final action on extending the order now rests with the International Trade Commission (ITC), which must determine that the dumping behavior harms the domestic concentrate industry. The ITC is scheduled to reach its decision in mid-September.

“The government reviewed the data we presented and agreed with our conclusion that without the antidumping order in place, the previous unfair pricing practices would return,” said USApple President and CEO Nancy Foster. The decision, she said, represents a victory for domestic concentrate producers and U.S. apple growers.

The Commerce Department’s final ruling follows a four-month review to determine whether the current antidumping order, applied to certain imports of apple juice concentrate in June 2000, should be lifted. USApple has been leading industry efforts to maintain the dumping order.

By fighting to maintain the dumping order for the two remaining domestic commercial concentrate producers – Naumes Concentrates Inc., Medford, Ore., and Tree Top Inc., Selah, Wash. – USApple’s goal is to preserve important markets for U.S. juice apples, which represent an important source of revenue for apple growers.

“By continuing the order, U.S. apple juice concentrate producers are more likely to remain in business and U.S. apple growers will retain this important market for their fruit,” she said.

Antidumping orders are required to be reviewed every five years to determine if they are still required. The order was established in 2000 when the Department of Commerce determined that the sales of NFAJC from China “were made at less than fair value.” As a result, import duties ranging from 3.83 percent to 51.74 percent were imposed on Chinese exporters.

“USApple calls on the ITC to continue the order to prevent further economic hurt in the U.S. apple industry,” Foster said.

USApple submitted information to the Commerce Department and the ITC that shows how a resumption of the previous predatory pricing procedures in the NFAJC market could well lead to the extinction of the domestic concentrate industry.

“The antidumping margins in place have been successful in stabilizing the U.S. apple juice concentrate market by shutting some Chinese exporters out of the U.S. market,” Foster said. “But without this protection, these firms would be free to enter the U.S. market and compete in a predatory, low-price manner for market share. Because apple juice concentrate is a commodity, lowering prices is the only tool available to differentiate product and gain market share. Removing the antidumping duties would encourage firms to offer product in the U.S. market at unfair prices, leading to the collapse of the concentrate market.”

There are, she said, four clear indicators that suggest the removal of the antidumping order would pose a significant and imminent threat to the domestic apple juice concentrate market: China’s increasing production capacity; lack of juice demand in China; trade barriers in other markets; and previous dumping behavior.

Because of these factors, USApple argued, it is virtually assured that the removal of the order would result in the Chinese exporters again offering concentrate at less than fair prices.