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:
||Subsidy rate %
|Aceitunas Guadalquivir S.L.
|Agro Sevilla Aceitunas S.COOP.
|Angel Camacho Alimentacion S.L.
In addition to the above countervailing duty rates the following antidumping duty rates will apply:
adjusted for subsidies %
|Aceitunas Guadalquivir S.L.
|Agro Sevilla Aceitunas S.COOP.
|Angel Camacho Alimentacion S.L.
The official notice by the International Trade Commission can be found in the Federal Register (insert link)
The antidumping duty rates for Spanish ripe olives came in late last Friday and they are, unfortunately, quite high.
“The Department of Commerce preliminarily determines that ripe olives from Spain are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is April 1, 2016, through March 31, 2017. “
Here are the estimated weighted-average dumping margins, together with the previously determined countervailing duty rates:
|AD duty rate
||CV duty rate
|Agro Sevilla Aceitunas S.COOP
|Angel Camacho Alimentación
These duty rates will go into effect on the day this ruling is published (later this week) in the Federal Register and importers on record will have to pay cash deposits to CBP after every entry, effective immediately.
The United States Antidumping Law and Practice allows that any exporter of the goods which are subject to that order request that Commerce conduct a review of the previous year’s imports, one year after publication of an antidumping order, as well as during each subsequent year. The purpose of these administrative annual reviews is to calculate and assess the exact amount by which the foreign market value exceeded the U.S. price of each importation during that year and to recalculate the estimated duty rate for deposits on future entries of the goods.
An administrative review is conducted in essentially the same manner as Commerce’s initial antidumping investigation, and generally must be completed within one year. Commerce will issue a questionnaire similar to that used in the original investigation and will calculate preliminary and final antidumping margins.
Depending on the new margin calculation an importer can receive a refund plus interest if the estimated duty deposit was too high or pay additional sum plus interest if the estimated duty previously paid was too low.
The results of the DOC’s preliminary investigation were published in the Federal Register on November 28, 2017.
The International Trade Commission has issued the following Fact Sheet for the interested parties to better understand the decision and to be aware of the timeline of the steps that will follow. At the same time the investigation into the antidumping case continues and a preliminary decision is expected to be reached on or around January 18, 2018.
- On November 21, 2017, the Department of Commerce (Commerce) announced the preliminary results of the countervailing duty (CVD) investigation of imports of ripe olives from Spain.
- The CVD law provides U.S. businesses and workers with a transparent, quasi-judicial, and internationally accepted mechanism to seek relief from the market-distorting effects caused by injurious dumping and unfair subsidization of imports into the United States, establishing an opportunity to compete on a level playing field.
- For the purpose of CVD investigations, a countervailable subsidy is financial assistance from a foreign government that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.
- Commerce has calculated a preliminary subsidy rate of 2.31 percent for mandatory respondent, Aceitunas Guadalquivir S.L.U.; 2.47 percent for Agro Sevilla Aceitunas S.Coop.And.; and, 7.24 percent for Angel Camacho Alimentacion S.L.. All other producers/exporters in Spain have been assigned a preliminary subsidy rate of 4.47 percent.
- As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection (CBP) to require cash deposits based on these preliminary rates.
- Commerce is scheduled to announce its final determination on or about April 4, 2018, unless the statutory deadline is extended.
- If Commerce makes an affirmative final determination, and the U.S. International Trade Commission (ITC) makes an affirmative final determination that imports of ripe olives from Spain materially injure, or threaten material injury to, the domestic industry, Commerce will issue a CVD order. If either Commerce’s or the ITC’s final determinations are negative, no CVD order will be issued. The ITC is scheduled to make its final injury determination approximately 45 days after Commerce issues its final determination, if affirmative.
PRELIMINARY SUBSIDY RATES: SPAIN
EXPORTER/PRODUCER SUBSIDY RATE:
Aceitunas Guadalquivir S.L.U.:
Agro Sevilla Aceitunas S.Coop.And.:
Angel Camacho Alimentacion S.L.:
CASE CALENDAR BY EVENT VS. CVD INVESTIGATION DATE:
Petition Filed: June 22, 2017
DOC Initiation Date: July 12, 2017
ITC Preliminary Determination*: August 11, 2017†
DOC Preliminary Determination**: November 20, 2017
DOC Final Determination**: April 3, 2018†
ITC Final Determination***: May 18, 2018
Issuance of Order****: May 25, 2018
NOTE: Commerce preliminary and final determination deadlines are governed by statute. For CVD investigations, the deadlines are set forth in sections 703(b) and 705(a)(1) of the Tariff Act of 1930, as amended (the Act). These deadlines may be extended under certain circumstances.
†Where the deadline falls on a weekend/holiday, the appropriate date is the next business day.
* If the ITC makes a negative preliminary determination of injury, the investigation is terminated.
**These deadlines may be extended under the governing statute.
***This will take place only in the event of a final affirmative determination from Commerce.
****This will take place only in the event of a final affirmative determination from Commerce and the ITC.
Spanish Ripe Olives: Anti-dumping Duty Petition Moving Forward
On August 4th the International Trade Commission issued an affirmative decision regarding the anti-dumping duty petition filed on Spanish ripe olives, as published in the Federal Register.
This means that the case will continue in the final phase. Such decision is not surprising; the ITC typically finds affirmative in the preliminary phase, giving themselves more time to investigate the issues they need to consider in the case before they make a final determination. One of the major issues is the pricing of retail (branded and private label) and foodservice ripe olives. The ITC was made aware by the respondents (exporters and importers) about the substantial differences in retail pricing and required further information from the petitioners (domestic packers). This will be an important question that they will continue to review in the final phase.
The Department of Commerce is also moving forward with their investigation into the countervailing duty side of the case and has issued questionnaires to the Government of Spain and to the European Commission. The DOC has also named three mandatory respondents (Spanish ripe olive manufacturers) in the anti-dumping case: Aceitunas Guadalqivir S A, Agro Sevilla, and Angel Camacho Alimentacion S.L. Respondents received various questionnaires from the DOC this week that they have to complete in a very short period of time.
RIPE OLIVES FROM SPAIN: Anti-dumping and Countervailing Duty Investigations
As published in The Federal Register on Wednesday, June 28, 2017, the USITC (United States International Trade Commission) has just initiated an investigation to determine whether the domestic industry is “materially injured or threatened with material injury … by reason of imports of ripe olives from Spain.”
These investigations are instituted in response to a petition filed on June 22, 2017, by the Coalition for Fair Trade in Ripe Olives, consisting of Bell-Carter Foods, Walnut Creek, CA, and Musco Family Olive Company, Trace, CA. The Coalition alleges that Spanish ripe olives are sold in the United States at less than fair value and that their production is subsidized by the Government of Spain. Unless the Department of Commerce extends the time for initiation, the ITC must reach a preliminary determination in antidumping and countervailing duty investigation in 45 days, by August 7, 2017. The alleged dumping margins range from 84% to 232%.
It’s important to know that antidumping duties (AD) are assessed if foreign exporters sell to U.S. customers at “dumped” prices AND the U.S. industry is found to be injured or threatened with injury as a result of such imports. Countervailing duties (CV) are assessed if unfair subsidies are provided by a foreign government to benefit the production or exportation of the goods AND the U.S. industry is found to be injured or threatened with injury as a result of such imports. In this case the petitioners allege that both circumstances prevail.
The timing of the petition couldn’t have been worse; most Spanish olive packers and importers were busy preparing for and then attending the Summer Fancy Food Show in New York last week and earlier this week. With the long holiday weekend coming, the interested parties in the U.S. don’t have too much time to respond to the ITC’s quite extensive questionnaire that is due back on July 6th. Interested parties include Spanish manufacturers and exporters, as well as U.S. “importers of record” whose name appears on the Customs entry of products whose HTS numbers are listed in the scope of the petition.
The public records of the investigations can be found on the USITC website:
We have to get used to the “abnormal” being the new “normal” and this applies to the Spanish olive crop again. Whether the unusual crop results may be attributed to extreme weather conditions or to the nature of olives we won’t know; one thing is sure that the 2016 harvest didn’t turn out to be as it had been predicted just a few months before all olives were collected.
We were hearing about a “fantastic” crop from growers and processors until September. Then the reports started changing: first it was the drought over the summer months that seemed to affect the overall tonnage; then it was the rain in October that was supposed to help the yield as the fruit absorbed more water and grew larger. However, as we understood the rain came too late for certain varieties and a lot of the “shriveled” olives didn’t recover. Large size olives grew larger that resulted in a good crop of the Queen (Gordal) variety but the Hojiblanca variety that’s used for both olive oil and ripe olives came in quite short, so did the Manzanilla variety that’s used for green table olives. Given the short crop we can expect the ripe olive market to be quite firm throughout the year.
The growing season of Kalamata olives in Greece is similar to that of the various olive varieties in Spain but the Kalamata olives are left on the tree much longer to ripen; Kalamata olives aren’t going to change color during fermentation and they must reach their desirable purple color on the tree. Just like for Spanish olives, we expected a good crop until about August when we started hearing about the drought in Greece and some fruit fly that caused considerable damage to the crop. Growers were hoping that the yield would improve when rains arrived in the fall but, unfortunately, this wasn’t the case. By the time they finished the harvest in December, they reported an overall shortage of about 30% compared to 2015. There was very little carryover from 2015 and prices started to increase sharply in the New Year.
Kalamata olive processors don’t own Kalamata olive orchards; they buy olives from growers that keep their crop in fermentation tanks until they are ready for further processing and they sell the fruit little by little at prevailing market prices. In other words, they can charge what they want as long as they have a taker; the price is set at the time of the transaction. We understand from our suppliers that right now growers are holding the olives and they are not only quoting much higher prices than last year but they are also anticipating even higher prices later because of the short crop and high demand. Some packers think that the price of Kalamata olives may reach levels this year that we haven’t seen in some 15 years.
Olives are harvested in the fall for the Mediterranean areas of Spain, Italy, Greece, Turkey, Tunisia, and Morocco. Thus far, the growing conditions have been very good, but rain is still needed for the olives to mature to full size so the farmers can get the best yield. The fruit fly incidents have been causing some concern, but if the weather turns cooler, perhaps this will reduce the risk of crop damage. This is a newly reported problem still being assessed.
Olive Oil has been under some pricing pressure, keeping prices firm. There seems to be sufficient inventories of most varieties used for table Green Olives. The supply of the Hojiblanca Olives, used for ripe olives in Spain, and the Kalamata Olives in Greece, also have good numbers which maintains strong supply. Because of the financial crisis in Greece, over the past few seasons the farmers have been asking for more money which pushes up pricing.
Typically, new crop prices for olive oil and table olives are announced in January. The pricing for new crop Kalamata Olives is also usually announced early in the year as well, as this crop is still harvested into the first quarter of the year.
The new olive crop in Spain was predicted to be close to “normal average” a couple of months ago, however, the exceptionally hot weather in Europe in July & August seems to have caused problems. One of the main problems is that some of the fruit has shriveled and fallen off the trees prematurely, thus reducing the expected harvest volume. Packers are concerned that there will be even less Hojiblanca olives, which are normally used for ripe olives and olive oil, than last year.
Soaring prices and low carryover of olive oil isn’t helping the situation either. We can expect table olive packers to compete for the same raw material as olive oil manufacturers which will drive the prices up. We have started seeing higher offers for ripe olives even though packers are still using fruit from last year’s crop.
Recent articles in the international media have reported on the world olive oil shortage and subsequent rise in prices due to the poor harvest in Spain and Italy last year (these two countries are responsible for 70% of the global olive oil output). Spain has suffered from extreme heat and drought in the summer of 2014 as well as 2015. Italy was hit with fruit fly infestations and the deadly Xylella fastidiosa bacterium which has decimated olive groves in the Puglia region and is feared to have spread to other parts of Southern Europe. There are reported cases on the island of Corsica where France is trying hard to contain the outbreak.
The crop of other Spanish olive varieties, for example Manzanillas and Gordal (Queen) olives, look alright so far and growers expect an average harvest volume. Further information on the crop size by variety should be available soon. The ANUGA International Food Show in Cologne, Germany is coming up on October 20th, where packers usually announce their new crop prices for ripe olives. Green table olive prices will be revealed later, after the fermentation is complete and packers have a better estimate on the volume of the various calibers of olives.
The smaller Manzanilla olives are in plentiful supply, yet Hojiblancas used for processing into canned Ripe Olives are not as plentiful, and are good for crushing into Olive Oil. So prices are advancing for Hojiblancas. The farmers are currently asking high prices for Queens, the larger olives, with an eye on last year’s historically high prices. They are hoping to garner similar prices to last year’s despite the improved availability this year. Further, Egyptian growers are again in the market of larger Queens with more aggressive pricing than Spain is currently offering. It is a real tumultuous time in the olive market.
TYPICALLY PRICES SETTLE DOWN IN THE BEGINNING OF THE CALENDAR YEAR. It is too early to know exactly where the prices will settle to.
Harvest is underway and most varieties seem to yield an average crop, like Hojiblancas used for ripe and Manzanillas used for small green table olives. However, there is a tremendous shortage of large Queen (Gordal) olives. Shortage is usually expressed by a percentage figure, like 20-30% less than average. This year packers are reversing that figure and they are claiming that the volume of Queens will be only 30% of the average crop, i.e. 70% short! Collection of Queen olives started early and ended in two weeks which is unheard of. Packers bought up fresh fruit at any price and at this point no one is quoting for finished product yet. Some are talking prices two to three times what they were last year; that will obviously not be feasible but we can definitely expect significantly higher Queen olive prices in 2014 than this year.