May the identical apply to Australia and different markets?
The Commissioner for Commerce Duties of the Israeli Ministry of Economic system and Trade, Danny Tal, issued a preliminary determination on the anti-dumping investigation on imports of medical hashish from Canada.
The investigation, which started on January 18, 2024, discovered that imported hashish flowers have been offered at dumping costs, harming the native trade. If these outcomes maintain, a advice for an anti-dumping responsibility on Canadian hashish imports is anticipated.
The ultimate outcomes will probably be printed within the coming months, with firms having 30 days to submit their feedback.
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There may be additionally this remark from
Israel Imposes Tariffs on Canadian Hashish: A First Transfer within the International Hashish Commerce Warfare?
This important determination comes after the outcomes of considerable dumping charges starting from 63% to 369% by Canadian producers in Israel.
The Commissioner's investigation highlighted the disparity between the manufacturing facility value in Canada of $7.86 CAD/g ($5.8), whereas stating that comparable merchandise offered in Israel on the value of $2.1 CAD/g ($1.5).
Primarily based on its manufacturing prices, the Commissioner discovered a dumping charge of 63% for Decibel, and a charge of 112% for Organigram; whereas a value comparability of Pure Sunfarms merchandise in Canada vs. Israel discovered a 74% dumping charge.
Based on the report, damages within the Israeli medical hashish sector embody:
Worth Plunge: Retail costs fell under $11/g pushed by aggressive promotions resembling “purchase 1, get 1 free”. LPs have been pressured to promote under manufacturing prices, as much as $1.4/g. Producers confronted strain to promote biomass for $0.8/go much less.
Overcapacity: Firms should function under capability, sluggish growth and wrestle to safe capital. Inventories have grown from 1.2 tons in 2020 to 18.7t in 2022, with destruction elevated by 65% to 11.5 tons.
♀️ Unfair competitors: Consignment gross sales permit importers to pay just for the merchandise offered, flooding the market. Producers have pivoted to concentrate on imports, whereas distributors are decreasing offers with home producers.
Financial recession: the handfuls of gross sales and slender margins have pushed many firms into extreme monetary misery, inflicting job losses and extra funding within the sector.
Nevertheless, the Commissioner made daring assumptions, leaps of religion, and used artistic arithmetic within the investigation:
Manufacturing prices (akin to mass exports) have been outlined as 75% of the promoting value in Canada, however the true determine is probably going a lot decrease.
Small packets of 1-3.5g have been used to match retail costs, however Israel often sells 10 gram packets.
Canadian producers argue that their merchandise are of upper high quality, and their very own market is flooded (they get greater worldwide margins).
⏱️ The Commissioner will now finalize the report, submit it to the WTO and after a 30-day remark interval will advocate the imposition of tariffs on Canadian medicinal hashish imports, primarily based on manufacturing prices plus 8% of revenue
⁉ This transfer may give a bonus to native producers, or present alternatives to LPs from Portugal, Uruguay and South Africa.
Canadian LPs can reply by absorbing charges, concentrating on essentially the most worthwhile markets, or near third-party processors in locations like Portugal.
It may encourage different international markets, resembling Australia, to think about related protectionist commerce measures.
What penalties do you anticipate from this vital determination? Let me know your opinion within the feedback!
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