American consumers will pay more for orange juice because of a U.S. Commerce Department ruling ordering penalty tariffs of up to 60 percent on orange juice concentrate from Brazil, Brazilian growers said Thursday.
The tariffs, imposed in a preliminary ruling after Florida growers argued Brazilian companies were dumping concentrate in the United States below fair market values, will force Brazil to export 100,000 metric tons of concentrate annually elsewhere around the world, the Brazilian Association for Citrus Exporters said in a statement.
Prices are bound to rise in the United States because no other country can supply the United States with that amount, representing about 10 percent of American consumption, the group said.
Association president Ademerval Garcia said the decision will simply give more cash to Florida growers who were hurt last year by three hurricanes but are expected to stage a recovery this year. The storms knocked fruit from the trees, flooded groves and spread canker spores.
Garcia did not offer predictions on how much prices could rise, but said consumers will bear the brunt because U.S. supplies will be reduced without the Brazilian exports.
“This was a move to solve a short-term problem that doesn’t exist anymore: The damage caused by the hurricanes during last year’s harvest,” he said. “And it’s going to have a long-term impact on the market.”
September futures contracts for orange juice concentrate rose 60 cents to $92.55 Thursday after gaining 75 cents Wednesday, the day the ruling was issued by the Commerce Department’s International Trade Administration
The administration agreed with the Florida growers’ complaint and announced the antidumping duties to raise prices to what the U.S. government considers fair values.
Those tariffs ranged from 24.62 percent to a high of 60.29 percent. The highest was imposed on Montecitrus Industria e Comercio Ltda., which Commerce said stopped cooperating with its tariff-setting investigation.
U.S. Customs and Border Protection agents will now begin collecting the penalty tariffs on orange juice shipments from Brazil, pending final rulings in the case.
The Commerce Department will review its preliminary determination and issue final dumping duties in January. After that, the U.S. International Trade Commission will determine whether to uphold its initial ruling that U.S. producers were being harmed by the Brazilian shipments.
If the ITC in February upholds its preliminary finding of injury, then the revised dumping duties will become final.
Brazil shipped $98.6 million in orange juice to the United States in 2004, a drop of 37.6 percent from the $158 million in orange juice shipments in 2003.
Brazil is the world’s largest producer of orange juice, followed by the state of Florida.