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ITC initiates investigation on biodiesel import prices
 
By RACHEL LANE
D.C. Correspondent
 
WASHINGTON, D.C. — The biodiesel industry in Argentina and Indonesia is under investigation for the price of the imports into the United States.
 
The U.S. International Trade Commission (ITC) has begun an investigation into the prices in those countries compared to the price for imports into the U.S. If the investigation finds that import prices are artificially lower because the Argentine an and Indonesian governments support the export market, the U.S. may add a duty tax to those imports.
 
“Initiation of these investigations validates the allegations in our petition, and we look forward to working with the U.S. government agencies during the course of the next year to enforce America’s trade laws,” said Anne Steckel, National Biodiesel Board (NBB) vice president of Federal Affairs, in response to this announcement.
 
“Make no mistake, 2016 should have been a banner year for U.S. biodiesel producers with demand growth, stable feedstock prices and regulatory certainty that should have led to profitability and reinvestment in their businesses, but unfortunately that didn’t happen … “The loss of market share has left the domestic industry with substantial unused capacity and the artificially low prices these imports are sold at leave American biodiesel unable to get a fair return for their product,” she said.
 
Artificially cheaper imports cause the domestic market to have a decreased value, said Kaleb Little, senior communications manager for NBB. He said the U.S. Department of Commerce (DOC) reported evidence that Argentina’s dumping margin may be as high as 26.5 percent, while Indonesia’s margin may be as high as 28. The percentages indicate how much less the imports are selling for compared to U.S.-produced.
 
The biodiesel market has been growing within the United States and domestic supply has grown too, but over the last three years the import market has caused the domestic market to stall. “The idea is that the U.S. markets should be geared towards U.S. production. It’s been a priority for this administration,” Little said.
 
In the U.S., the biodiesel market produces more than 62,000 jobs and $14 billion in economic impact. If all the biodiesel used in the U.S. was produced domestically, the overall impact on jobs and the economy could double, he charged.
 
Biodiesel imports from Argentina and Indonesia surged by 464 percent, from 2014 to 2016. That growth has taken 18.3 percentage points of market share from U.S. manufacturers, he said.
 
Little did not know how purchasing the regularly priced domestic biodiesel rather than the artificially deflated imported biodiesel might impact the economy.
 
He said the information hadn’t been researched.
 
“When we see biodiesel from Argentina selling at a discount to the market price of soy oil, the main input into biodiesel, we know we are facing dumped pricing,” said Paul Soanes, CEO and president of Renewable Biofuels. “The United States is a key market for these exporters, and without a remedy, these unfairly traded mports are likely to continue unabated. That is a further threat to our business.”
 
The most popular biofuel in the U.S. are produced using corn or soybeans. Biodiesel can be used anywhere diesel is used, Little said. It is often used in commercial trucking, farm equipment and off-road machines.
 
As recently as 2011, the USDA Foreign Agricultural Service had no reported imports of biodiesel on a global scale. In 2013, Argentina was responsible for a total of fewer than 442,000 units, valued at about $950 a unit, and Indonesia imported about 250,000 units for $906 per unit.
 
In 2016, Argentina exported almost 1.5 million units valued at $813 per unit to the U.S., while Indonesia exported about 371,000 units for $723 per unit. Domestic prices in 2011 hit record highs at $5.74 a gallon for biodiesel. Prices remained about $4 throughout  2012 and 2013 before dropping below $4 in November 2013. While prices fluctuated, they did not rise above $3.50 after July 2014 and were below $3 for much of 2015.
 
According to the USDA Economic Research  Service, the U.S. produced 1.5 billion gallons of biodiesel and imported about 690 million gallons. Little said the imports come from around the world, but the largest increases have been from Argentina and Indonesia.
 
Argentina doesn’t have a domestic market for biodiesel, he said. As a result, the government has policies in place to send it to the United States at a lower cost than it can be purchased within Argentina. The government subsidizes the difference for the Argentinean producers.
 
“The companies are sending it to this market at a lower cost than they’re  selling it at their markets,” Little said, adding U.S. businesses are buying the cheaper biodiesel first, leaving U.S.-produced biodiesel unused.
 
The ITC will make a preliminary decision on May 5. The next step will be when the DOC announces its preliminary results regarding rates of subsidization and dumping, in the fall. Little would like to see a duty tax placed on the imports from the two countries, but that is unlikely to happen before the final decision made next spring. 
4/27/2017