Vienna, Va. – The U.S. Department of Commerce this week issued its preliminary determination in the first annual review of the U.S. antidumping order against apple juice concentrate imported from China. The determination would, if sustained in Commerce’s final determination this fall, eliminate antidumping duties for 10 of the 11 Chinese producers that Commerce reviewed. The eleventh producer, and all other Chinese producers, would continue to be subject to the U.S. antidumping duties of 51.74 percent that have been in place since May 2000.

This preliminary determination would have no effect on the antidumping duties being collected at the border currently. Any change in the duties being collected will only occur when Commerce issues its final determination later this year. Commerce has invited comments on aspects of its preliminary determination that, if changed, would restore significant antidumping duties.

“We are disappointed by this indication of Commerce’s possible change of heart regarding fair trade in the apple juice concentrate market,” said U.S. Apple Association (USApple) Vice President James (Jim) R. Cranney, Jr. “Our industry is drowning in low-priced Chinese concentrate, prices are still falling, and U.S. apple growers are going bankrupt in the process. That’s not our idea of fair trade.”

The U.S. apple industry requested last June that the U.S. government review the antidumping duties imposed in 2000, charging that Chinese concentrate suppliers were still illegally dumping their product in the U.S. market and harming U.S. producers. Chinese concentrate producers also requested an administrative review, asking to decrease the duties.

The U.S. government applied antidumping duties of up to 51.74 percent on Chinese concentrate imports beginning in May 2000, following the Commerce Department and U.S. International Trade Commission’s rulings that Chinese concentrate was sold in the U.S. market at prices below production costs, causing economic harm to U.S. concentrate producers – a practice called dumping that is illegal under U.S. trade law. While most Chinese concentrate suppliers were subjected to the 52 percent antidumping duty, several suppliers were assigned individual antidumping duty rates ranging from 9 percent to 52 percent, based on the margin by which their companies’ sales prices were below their estimated costs of production.

In the current preliminary determination for its first administrative review of its antidumping decision, the Commerce Department changed its calculation of the cost of production of apple juice concentrate in India, which Commerce used as a surrogate market economy for China. As one key factor in this change, Commerce lowered the price of juice apples in India, thus lowering the cost of production, and causing several Chinese producers to be selling at prices above that cost. Commerce invited comments on whether the Indian juice apple price it used was correct.

“Commerce has a lot of latitude in how it interprets the data at hand,” said USApple’s Cranney. “We are hopeful that the outcome will change when Commerce revisits its calculations before issuing its final determination.”

In related news, a U.S. trade court remanded to Commerce the department’s May 2000 final dumping decision, seeking clarification in response to a July 2000 appeal brought by Chinese concentrate producers. A final decision on the appeal is expected sometime this fall.

Below-Cost Concentrate Imports Cause U.S. Industry Losses
The recent flood of imports of below-cost Chinese concentrate on the U.S. market has caused significant economic damage to the U.S. apple industry in recent years. Chinese concentrate imports increased by more than 1,200 percent between 1995 and 1998. During that same period, the average price of Chinese concentrate imports declined by 53 percent from $7.65 per gallon in 1995 to $3.57 per gallon in 1998. U.S. concentrate producers consequently were forced to slash their prices, and to drastically reduce the price they paid for U.S. juice apples.

The average price received by U.S. growers for juice apples fell from $153 per ton in 1995 to $55 per ton in 1998, a decline of 64 percent. U.S. apple growers lost more than $135 million in revenue from the decline in juice apple prices, according to U.S. Department of Agriculture data.

The Coalition for Fair Apple Juice Concentrate Trade (FACT), an industry-wide coalition of apple associations, processors and concentrators administered by USApple, oversees the apple industry’s antidumping initiative. The antidumping suit was brought on behalf of the following domestic concentrate producers: Coloma Frozen Foods, Inc., Coloma, Mich.; Green Valley Packers, Arvin, Calif.; Knouse Foods Cooperative, Inc., Peach Glen, Pa.; Mason County Fruit Packers Cooperative, Inc., Ludington, Mich.; and Tree Top, Inc., Selah, Wash.

The U.S. Apple Association (USApple) is the national trade association representing all segments of the apple industry. Members include 40 state apple associations representing 9,000 apple growers throughout the country, as well as nearly 500 individual firms involved in the apple business. USApple’s mission is to provide the means for all segments of the U.S. apple industry to join in appropriate collective efforts to profitably produce and market apples and apple products.