Calling Out OJ Market Crashers
June 1, 2009 In May, Florida Citrus Mutual (FCM) filed a petition with the U.S. Department of Commerce (DOC) after a major Brazilian processor violated trade law by dumping juice into the domestic marketplace.
In the filing, FCM asserts that Sao Paulo-based Citrovita beginning in 2008 sold orange juice into the U.S. at prices well below its calculated cost of production, which is prohibited under an existing anti-dumping order against Brazilian processors.
“Florida Citrus Mutual continually monitors trade data to determine whether orange juice exporters are playing by the rules, and we believe that Citrovita’s exports need to be investigated,” says Michael Sparks, executive vice president of FCM. “The Florida citrus grower deserves to operate in a fair marketplace and that isn’t the case when Brazilian juice processors dump product into the U.S. We won’t stand for it.”
Protecting Value
The action against Citrovita is in addition to a current anti-dumping order on orange juice that was issued in March 2006 which subjected four Brazilian exporters — Citrosuco, Cutrale, a Louis Dreyfus affiliate, and Montecitrus — to pricing scrutiny by the DOC. To offset the unfair prices, the exporters are required to pay an annual deposit that can only be refunded if they do not dump product.
Mutual is asking the DOC to investigate Citrovita through a “change in circumstance” petition that would add the company to the current order.
The anti-dumping order is estimated to have increased the on-tree value of Florida orange crops by 4% to 6%, or $85 to $125 million, over the 2005–2006 and 2006–2007 seasons.
Stellar Counsel
Under the DOC rules, the agency must decide whether to initiate a review of Citrovita within 45 days after the filing. The Department then has 270 days to make a determination on FCM’s claims.
FCM board member Marty McKenna noted in the association’s newsletter, Triangle, that FCM was well-equipped to handle such investigations. He added that the association’s legal counsel constantly scrutinizes data of Brazilian juice imports to be on the lookout for trade infractions, and they are “stellar” at presenting a strong case for dumping when it occurs.
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