The US International Trade Commission (ITC) and the Department of Commerce (DOC) have begun investigating a petition regarding white grape juice concentrate from Argentina. US competitors claim that their Argentine counterparts supply the US market at less than fair value. The petition also states that the Argentinian government unfairly subsidizes processors and exporters, giving them an advantage over their counterparts in the US market.
Argentina and the US have reverse grape seasons, offering Argentine white grape juice concentrate exporters a pricing advantage. It also allows them to study the pricing trends of their US counterparts to set their prices significantly lower. Consequently, white grape juice concentrate from Argentina has dropped to USD 6 per gallon, 25% less than the American product. This price trend has led to Argentine suppliers flooding the US market with grape juice, resulting in US competitors such as Delano Growers Grape Products submitting dumping claims against them.
The competitive advantage enjoyed by Argentine suppliers has been detrimental to the growth of the US grape juice industry. Over the past 20 years, the US grape juice market has favored Argentine suppliers, evidenced by Argentine grape juice exports increasing by 73%, while US suppliers have seen their domestic sales shrink by 89%. This devastating trend has resulted in multiple US producers exiting the industry. This has resulted in, domestic grape juice production falling from 30 million gallons to 7 million gallons this year.
If Argentine exporters are found guilty by the ITC and DOC, they could face countervailing (CVD) duties of 1% and anti-dumping (AD) duties of 124.45%. This scenario seems likely, as the ITC and the DOC recently published a report stating that US competitors had reasonable grounds for their claims. Investigations continue until September, at which point the ITC and the DOC will issue a preliminary anti-dumping determination.
Higher export duties could lead to Argentine grape juice shipments to the US reducing to a noticeable degree, severely impacting Argentina's grape juice trade as the US is the country's largest market. Argentinian grape juice processors could look to alternative markets, such as Japan, Canada, Germany, and China, where demand has increased. Over the past five years, grape juice imports in Germany and China have increased by 19% and 10%, respectively.