The provisional duty was imposed while intensive investigations continue to determine the level of dumping, currently pegged at 74.04%, which may lead to further sanctions.
"That is problematic for us. The US is a good market for us but now the duty, in addition to the price, makes the product too expensive to sell so we have to look for an alternative market, maybe in the Americas. But it is not going to be an easy task," said Rudi Richards, the general manager of the South African Fruit Juice Association.
He said the price was a sticking point for an otherwise lucrative market in which South African producers had a competitive edge thanks to the low tariff stipulated under the Africa Growth and Opportunity Act.
According to reports, recent trade data shows that US imports of lemon juice volumes rose from 7.4 million litres in 2019 to 29.8m litres in 2021 while the value of imports increased from $4m in 2019 to $11.2m in 2021.
Lisa W Wang, the assistant secretary for enforcement and compliance at the US Department of Commerce International Trade Administration, said the department had received an anti-dumping duty (AD) petition in December concerning imports of lemon juice from South Africa, filed by the Ventura Coastal LLC (the petitioner).
Ventura Coastal has requested a 128.61% anti-dumping duty against exports of lemon juice from South Africa and 555.22% against Brazil.
The investigation then zoned in on South Africa’s Cape Fruit Processors, which was found in the preliminary report to have a had a dumping rate of 55.67% and Polokwane-based Granor Passi had 74.04%, while those in the category of ‘other’ had 55.67%.
"The petitioner submitted comments with respect to Cape Fruit and Granor Passi for consideration in the preliminary determination and neither Cape Fruit nor Granor Passi submitted comments for consideration in the preliminary determination," Wang said.
Richards said the road ahead was still an intense one as there were several submissions, representations and hearings to be made down the road while the US determines the extent of LTFV and volumes sold.
"Brazil has indicated that it will apply for a postponement of the proceedings, I think we will do the same. The current duty is provisional until the investigations are completed," he said.
He indicated that the current season was ongoing with normal crop volumes, which indicated a good season.
The industry fears that if duties are imposed, the excess volumes will have to move to smaller markets, further suppressing the prices and increasing the probability of anti-dumping actions in those markets as well.
Industry fears are that the high anti-dumping tariffs will lead to a glut of lemon juice as there was already an excess on the global market.
Andre Swart, the managing director of Venco Fruit, which is also part of the investigation, earlier indicated that lemon juice producers would not only generate less revenue from alternative markets, but securing those would be a challenge as well due to the oversupply of lemon juice.
"It means that we will have much less imports in the US and we have to find other markets for that," he said.
BUSINESS REPORT