THE US International Trade Commission (ITC) has ruled that there was a reasonable indication that South Africa and Brazil were “injuring the US market” with their exports of fresh lemons and juice concentrates − a sour outcome for the local citrus industry.
This ruling, late on Monday, is a prelude to a protracted process of investigation likely to take months through which South Africa and Brazil will fill out already provided questionnaires and comply with the US authorities, leading to an adjustment in duties which could go in any direction.
General manager of the South African Juice Association (Saja), Rudi Richards, confirmed that South Africa and Brazil had been sent questionnaires by the ITC, which was expected to take them until March to complete, and then follows months of research along with investigations to the final decision on what the new duty structure would be like.
“It is a long process, it will take months. We do not know if the duty will be low or high. We have no idea,” Richards said. South African exports of lemon juice have been growing at a brisk pace, up 61 percent from 2018 to 2021, so any restrictions will knock the lemon industry.
South Africa is the world’s second largest exporter of citrus fruit, with about 65 percent or 2.25 million tons of the crop of lemons, limes, oranges, grapefruit and soft citrus destined for international markets.
Industry insiders said should the petition succeed and anti-dumping tariffs be imposed, South Africa’s juice processors would be left with a lemon juice glut.
Lemon juice-makers would not only generate less revenue, but they will have to target alternate export destinations in a world that is already experiencing an oversupply of lemon juice.
The issue was brought to the spotlight in December by Ventura Coastal, an American fruit juice producer, which filed an anti-dumping application against lemon juice from South Africa and Brazil.
According to a summary of the petition, Ventura asked the ITC for a 128.61 percent anti-dumping duty against exports of lemon juice from South Africa and 555.22 percent against Brazil.
The 2021 overall citrus produce, according to the Citrus Growers Association of Southern Africa, broke all season records, with an estimated 158.7 million cartons, 130 million cartons exported in 2019, followed by 146 million cartons in 2020.
Products covered by the investigation is lemon juice for further manufacture, with or without the addition of preservatives. The scope also includes lemon juice blended with lemon juice from sources not subject to the investigation.
Excluded from the scope is lemon juice at any level of concentration packed in retail-sized containers ready for sale to consumers, typically at a level of concentration of 48 GPL and beverage products such as lemonade that typically contains 20 percent or less lemon juice as an ingredient.
South Africa caught a lucky break last year with the relaxation of temperature requirements on citrus imports to China, which now allow for fruit to have a 3°C core temperature over 24 days, instead of the previous -0.06°C temperature over 18 days.
While non-lemon citrus exports from South Africa to China reached 130 000 metric tons in 2020, only 151.5 tons of lemons were exported that same year, accounting for less than 0.03 percent of South Africa’s total lemon exports.
Richards said the options of marketing South Africa’s lemon products lay with producer companies who could look to the local market, China and the rest of Africa.
BUSINESS REPORT ONLINE