Moves by the NZ potato industry to have anti-dumping tariffs imposed on European imports could play into the hands of the EU, warns a long-time trade negotiator.
Growers’ organisation Potatoes NZ (PNZ) has applied to the Ministry of Business, Innovation & Employment to consider the anti-dumping move, claiming a ‘real threat of material injury’ to the New Zealand potato industry. It believes the situation has arisen due to the Covid-19 global pandemic causing supply chain disruption in hospitality industries worldwide.
“The threat is a result of huge surplus inventories of frozen potato products and processing potatoes in Belgium and the Netherlands,” PNZ claims.
“The surpluses, combined with the support the European industries are receiving from their governments, will drive export prices down further, increasing dumping margins and threaten the New Zealand industry.”
According to its own analysis, PNZ claims current ‘dumping margins’ are anywhere between 95% to 151%.
“We expect these margins to increase. This will lead to price undercutting for the NZ products of between 18% and 38%. The damage this will cause will destroy the NZ industry,” it claims.
Meanwhile, a recent report commissioned by PNZ – ‘Economic and Community Impact Report’ – by researchers BERL, claims that in the absence of a duty, potato processors would be forced to cut production and demand for potatoes from NZ growers would drop.
“Inevitably, this would lead to a loss of employment and a threat to the viability of some potato growing businesses.
“The imposition of an anti-dumping duty on dumped imports of frozen potato products, would help to maintain demand for New Zealand grown potatoes, and ensure the continuity of employment and business in the growing sector,” it claims.
“A duty would mean that the potato growers would experience the same market conditions, including competition between themselves and fluctuations in market prices, as they did before the dumping occurred.”