Lemon Juice From Argentina and Mexico Investigation Nos. 731-TA-1105-1106 (Review) Publication 4418 July 2013 U.S. International Trade Commission Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS Irving A. Williamson, Chairman Daniel R. Pearson Shara L. Aranoff Dean A. Pinkert David S. Johanson Meredith M. Broadbent Robert B. Koopman Director, Office of Operations Staff assigned Amy Sherman, Investigator Katherine Baldwin, Industry Analyst Amelia Preece, Economist Mary Klir, Accountant Charles St. Charles, Attorney Elizabeth Haines, Supervisory Investigator Special assistance from Lita David-Harris, Statistician Darlene Smith, Statistical Assistant Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Lemon Juice From Argentina and Mexico Investigation Nos. 731-TA-1105-1106 (Review) Publication 4418 July 2013 CONTENTS Page Determinations ................................................................. 1 Views of the Commission ......................................................... 3 Additional and Dissenting Views of Commissioner Daniel R. Pearson.................... 29 Part I: Introduction ............................................................ I-1 Background .................................................................. I-1 The original investigations ................................................... I-2 Summary data ............................................................. I-2 Previous and related investigations................................................ I-2 Statutory criteria and organization of the report ...................................... I-6 Statutory criteria ........................................................... I-6 Organization of the report .................................................... I-7 Commerce’s reviews ........................................................... I-8 Administrative reviews ...................................................... I-8 Five-year reviews .......................................................... I-8 The subject merchandise ........................................................ I-9 Commerce’s scope .......................................................... I-9 Tariff treatment ............................................................ I-9 The product .................................................................. I-9 Physical characteristics and uses ............................................... I-9 Manufacturing process ...................................................... I-11 Domestic like product issues .................................................... I-13 U.S. market participants ........................................................ I-13 U.S. processors ............................................................ I-13 U.S. importers ............................................................. I-14 U.S. purchasers ............................................................ I-15 Apparent U.S. consumption ..................................................... I-15 U.S. market shares ............................................................ I-17 Part II: Supply and demand information ........................................... II-1 U.S. market characteristics ...................................................... II-1 Channels of distribution ........................................................ II-1 Geographic distribution ........................................................ II-2 Supply and demand considerations................................................ II-3 U.S. supply ............................................................... II-3 U.S. demand .............................................................. II-9 Substitutability issues .......................................................... II-12 Knowledge of country sources ................................................ II-13 Factors affecting purchasing decisions .......................................... II-13 Comparison of domestic products, subject imports, and nonsubject imports ............. II-18 Elasticity estimates ............................................................ II-22 U.S. supply elasticity ........................................................ II-22 U.S. demand elasticity ....................................................... II-23 Substitution elasticity ....................................................... II-23 i CONTENTS Page Part III: Condition of the U.S. industry ............................................ III-1 Overview.................................................................... III-1 Changes experienced in operations ............................................. III-1 Anticipated changes in operations .............................................. III-2 U.S. processors’ capacity, production, and capacity utilization .......................... III-2 Constraints on capacity ...................................................... III-3 U.S. processors’ shipments ...................................................... III-3 U.S. processors’ inventories ..................................................... III-3 U.S. processors’ imports and purchases ............................................ III-4 U.S. processors’ employment, wages, and productivity ................................ III-4 Financial experience of the U.S. processors ......................................... III-5 Introduction ............................................................... III-5 Operations on lemon juice .................................................... III-5 Capital expenditures ........................................................ III-6 Assets .................................................................... III-6 Part IV: U.S. imports and the foreign industry ...................................... IV-1 U.S. imports ................................................................. IV-1 Overview ................................................................. IV-1 Imports from subject and nonsubject countries .................................... IV-1 U.S. importers’ imports subsequent to December 31, 2012 ............................. IV-3 U.S. importers’ inventories ...................................................... IV-3 Cumulation considerations ...................................................... IV-4 The industry in Argentina ....................................................... IV-6 Overview ................................................................. IV-6 Lemon juice operations ...................................................... IV-7 The industry in Mexico ......................................................... IV-9 Overview ................................................................. IV-9 Lemon juice operations ...................................................... IV-10 Antidumping and countervailing duty investigations in third-country markets .............. IV-11 Global market ................................................................ IV-11 Global supply.............................................................. IV-11 Global demand ............................................................. IV-11 Part V: Pricing data ............................................................ V-1 Factors affecting price ......................................................... V-1 Raw material costs .......................................................... V-1 U.S. inland transportation costs ................................................ V-1 Pricing practices .............................................................. V-2 Pricing methods ............................................................ V-2 Sales terms and discounts .................................................... V-2 Price leadership ............................................................ V-3 ii CONTENTS Page Part V: Pricing data–Continued Price data ................................................................... V-3 Price trends ............................................................... V-4 Price comparisons .......................................................... V-5 Purchaser perceptions of relative price trends ..................................... V-6 Appendixes A. Federal Register notices....................................................... A-1 B. Hearing witnesses ............................................................ B-1 C. Summary data............................................................... C-1 D. Responses of U.S. processors, U.S. importers, U.S. purchasers, and foreign producers concerning the significance of the suspension agreements and the likely effects of termination ................................................................. D-1 E. Normal values assigned under the suspension agreements ............................ E-1 Note.--Information that would reveal confidential operations of individual concerns may not be published and therefore has been deleted from this report. Such deletions are indicated by asterisks. iii UNITED STATES INTERNATIONAL TRADE COMMISSION Investigation Nos. 731-TA-1105-1106 (Review) LEMON JUICE FROM ARGENTINA AND MEXICO DETERMINATION On the basis of the record1 developed in the subject five-year reviews, the United States International Trade Commission (Commission) determines, pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. ' 1675(c)), that termination of the suspended antidumping duty investigation on lemon juice from Argentina would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.2 The Commission also determines that termination of the suspended antidumping duty investigation on lemon juice from Mexico would not be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. BACKGROUND The Commission instituted these reviews on August 1, 2012 (77 FR 45653) and determined on November 5, 2012 that it would conduct full reviews (77 FR 67833, November 14, 2012). Notice of the scheduling of the Commission=s reviews and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on December 5, 2012 (77 FR 72384). The hearing was held in Washington, DC, on May 16, 2013, and all persons who requested the opportunity were permitted to appear in person or by counsel. 1 The record is defined in sec. 207.2(f) of the Commission=s Rules of Practice and Procedure (19 CFR ' 207.2(f)). 2 Commissioner Daniel R. Pearson made a negative determination with respect to the suspended investigation on lemon juice from Argentina.  1