Brazil may be tempted to enforce a temporary ‘anti-dumping rule’ for imported frozen french fries sometime this month. The tax would mainly hit Belgian and Dutch potato product manufacturers.
Important market
Brazil is an important export market for the Belgian and Dutch potato manufacturers. The Dutch exported some 83,000 tons of frozen food to Brazil, which equates to about 166,000 tons of potatoes. That means the Netherlands are the second largest exporter to Brazil, following Argentina. Belgium, with 71,000 tons (which represents 142,000 tons of potatoes) is third in the list. Overall, Belgium process nearly 4 million tons of potatoes into cooled and frozen French fries, puree, chips, cooked potatoes, flakes and granulates.
The strong import numbers did not please local manufacturer Bem Brasil Alimentados, which currently produces about 79,000 tons annually, planning to add another 115,000 tons in the near future. The company accused European importers (Belgium and the Netherlands, but also France and Germany) that they were dumping their products onto the Brazilian market. To support their claim, they refer to the pricing between July 2014 and June 2015, which were 18 to 41 % below the prices used to export to the United Kingdom. Belgian prices apparently differ nearly 25 %.
Europeans fight back
The European potato manufacturers deny the accusation and feel the complaint is merely an attempt to protect local production. Even though there is still an ongoing investigation, Brazil could decide to enforce a temporary anti-dumping tax which might mean import costs could grow 40 %. That would basically price the European frozen French fries out of the market.
The European potato industry is currently examining how it can fight back: one of the options is to create an interest group with local parties like importers, retailers and processors which could then point to how import helps the local economy and populace. One possible explanation could be that an additional import tax could cause price hikes, which could then spur inflation.
