Schreiber Foods International, Inc.
Importers of Ambrosia® and Other Fine Brands
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Temporary suspension of section 301 tariff increase on Chinese goods

As you may have heard on the media over the weekend, President Trump and Chinese President Xi reached an agreement at the G20 summit in Buenos Aires that resulted in the temporary suspension of the additional 15% duty on Chinese products imported into the US, that was set to go in effect on January 1st, 2019.

 

The “Section 301” ruling was released back in September, as part of the US’ continuing response to China’s abuse of intellectual property and forced transfer of American technology. This rule included the immediate assessment of an additional 10% duty on some 6000 items (List #3), including all food products that we import from China. According to this rule the 10% duty was to increase to 25% with respect to products entered into the US after January 1, 2019.

 

However, China has just agreed to start purchasing agricultural products from US farmers immediately and to also buy substantial amount of energy, industrial and other product from the US to reduce the trade imbalance between our countries. They have also agreed to begin negotiations “on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture”, according to the joint statement of the two countries. “Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If, at the end of this period of time the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%”, the announcement said.


MANDARIN ORANGES FROM CHINA IN HIGH DEMAND

As reported in May, Mandarin Oranges continue to be very difficult, with supply almost nonexistent in China.  Prices rose drastically from April-July with increases as high as 25-30%. Some believe that there may be a few available stocks come September when the suppliers take a good look at what is left in the warehouse vs. what is expected to ship on contracts.  We expect prices to hold firm until the new crop.  New harvest normally begins at the end of October to early November, with shipments of canned mandarin oranges arriving at the end of December or early January.  There will be little to no carryover going into the new crop that is expected to be better than last year’s.  We should see some relief in prices heading into the New Year.


THAI PINEAPPLE PACKERS: SUPPLY AND DEMAND TO BALANCE BY WINTER 

Thailand had a decent summer crop and prices are currently stable as factories have closed production until September.  Stocks of canned pineapple were relatively high at the end of May and June that caused the price of certain pack sizes to dip slightly as packers wanted to move out some of the inventory.  The price of fresh pineapple went as low as 3 Baht per kilo due to sluggish demand.  This is not a good situation for the farmers or producers.  At these prices farmers look to alternative crops that will give them a higher value per acre of cultivated land.  At this moment we do not know the effect of this low raw material cost on future crops, but we are expecting a fairly normal winter crop, with stable pricing.  Flooding in certain regions of Thailand has put stress on many agricultural products but nothing has been reported at the moment of affecting the pineapple crop. This is something that we will be watching closely in the upcoming months.


UPDATE #3: DOC’s Final Determination on Ripe Olives from Spain

The Department of Commerce (DOC) has made a final determination in the countervailing duty investigation and found that countervailable subsidies are being provided to producers and exporters of ripe olives in Spain. DOC conducted the verification of the information submitted by the European Commission, the Government of Spain and the three mandatory respondents (Spanish ripe olives producers). At the end of the process the DOC has determined that there is a subsidy, or a financial contribution by an “authority” that “gives rise to a benefit to the recipient and that such subsidy is specific”, giving advantage to Spanish ripe olive producers over domestic producers on the US market.

These are the final countervailable subsidy rates:

Exporter/producer Subsidy rate % 
Aceitunas Guadalquivir S.L.

27.02

Agro Sevilla Aceitunas S.COOP.

7.52

Angel Camacho Alimentacion S.L.

13.22

All-Others

14.75

In addition to the above countervailing duty rates the following antidumping duty rates will apply:

Exporter/producer

Calculated margin

adjusted for subsidies %

Aceitunas Guadalquivir S.L.

17.45

Agro Sevilla Aceitunas S.COOP.

25.39

Angel Camacho Alimentacion S.L.

16.83

All-Others

19.98

The official notice by the International Trade Commission can be found in the Federal Register (insert link)

https://www.federalregister.gov/documents/2018/06/18/2018-12990/ripe-olives-from-spain-final-affirmative-countervailing-duty-determination


Mandarin Oranges are Tight and Expensive

As reported in January, Mandarin Oranges have proven to be difficult this year.  Product continues to be in short supply due to no carry-over from the previous year, bad crop conditions, and a decrease in labor pool.  Prices have increased dramatically over the past 2 months, with increases as high as 20-25%.  Whole Segments in Juice are the most difficult to secure at the moment. Many suppliers indicate they are sold out completely until new crop.

We expect prices will continue to hold at these higher levels until new crop begins. The challenge will be securing enough product to hold until the new crop.


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