The US lemon juice market is still growing and is valued at USD 130 million, including exports from the US’ key suppliers, SA, Argentina, Italy, Mexico, Brazil, and Spain. Currently, SA is banned from exporting fresh lemons to the US due to crop residues of products containing a fungal disease called black spot. As a result, the US market remains attractive for SA’s lemon juice exporters.
A lemon juice processing facility in SA. (Source: Venco Fruits)
The US lemon juice processors that presented the complaint claim that SA and Brazilian suppliers are flooding the US market with large volumes of underpriced lemon juice as a means of squeezing their US competitors out of the market. As a result, the anti-dumping tariff applied on SA suppliers by the International Trade Commission (ITC) could rise by 128%, while Brazilian suppliers could face a 555% tax rise. Similar complaints of lemon juice dumping were placed against suppliers in Argentina and Mexico.
If anti-dumping tariffs are imposed, South African lemon juice producers will remain with an excess supply of lemon juice. The tariffs could also result in a reduction in export revenue. This could push South African lemon juice processors to seek alternate export destinations such as the EU. However, this may prove challenging as the global market currently has an excess of lemon juice. The excess supply of lemon juice has led to price reductions in the US market, with prices expected to remain low in other key markets.
The anti-dumping tariffs could stifle the South African citrus industry, which has witnessed significant growth in recent years, along with penetrating new markets. According to the Citrus Growers’ Association (CGA), South African citrus exporters shipped 161.6 million cartons in 2021, increasing by 18.6 million cartons YoY. South African lemon exports rose by 5% YoY to 29.7 million cartons. A total of 2.8 million mt of citrus were produced by the country in 2021, with 20% processed. The ITC will provide a verdict by 14 Feb-21.
Processed lemons could recover in 2021-22, following a dramatic decrease of 38.2% in MY 2020-21 at 178K mt. According to the USDA, SA lemons and limes for processing will rise by 2.7% in MY 2021-22, reaching 114K mt, due to increased production.