Concerns
are mounting within China’s sweeteners industry over the risk of Chinese
sucralose becoming a target for an anti-dumping investigation by the US or EU,
according to industry sources.
Chinese
manufacturers have been exporting more and more sucralose this year at ever
cheaper prices, increasing the danger of an anti-dumping suit. According to
China Customs data, Chinese sucralose exports were up 8% year on year during H1
2015, while prices were down 19%. Prices have more than halved since 2012.
Officials
from the China Food Additives & Ingredients Association (CFAA) urged
manufacturers to take decisive action to avoid an anti-dumping suit during the
sweetener industry’s June annual meeting in Wuhan, Hubei Province.
Attendees
were reminded of ongoing anti-dumping investigations against Chinese acesulfame
K and aspartame in the EU, and warned that the sucralose industry would face
similar problems unless companies adjusted their sales and production
strategies immediately.
The
comparison is sure to have struck home with manufacturers, as the recent
development of the sucralose market appears remarkably similar to that of
acesulfame K. Nutrinova filed an anti-dumping suit against Chinese acesulfame K
last year after Chinese exports of the sweetener rose sharply and prices
dropped 16% between 2012 and 2014. Indeed, the two cases differ mainly in the
fact that sucralose prices have fallen further and exports have increased even
faster.
JK
Sucralose raised its export prices for sucralose 8% in late June, and CCM
expects more manufacturers to follow suit in the coming months.
However,
industry insiders fear that this may be too little, too late to avoid an
investigation being launched.
Tate
& Lyle: a ‘very favorable’ time to file a suit
The
perception within the industry is that a suit is most likely to come from
British sugar and sweetener giant Tate & Lyle.
The
company recently posted its worst annual sales figures since FY2008, with a
huge 73% drop in revenue from sucralose. The accompanying statement attributed
this sharp drop to ‘capacity increases in China’ and the ‘overhang of unsold
Chinese sucralose’, among other things.
And
Tate & Lyle’s recent decision to close its Singapore facility and center
all its sucralose production in the US, a move which should be completed by
early 2016, would also make it easier for the company to win such a suit,
according to a Chinese industry insider:
“This
[move] is very favorable for Tate & Lyle to file an anti-dumping lawsuit in
the US to fight against Chinese sucralose, as it can collect a large amount of
data to demonstrate the negative effect the low prices have had on its
business”, said the insider.
A
nightmare scenario
The
idea of being shut out of the EU or US is a nightmare scenario for Chinese
sucralose companies, as these markets account for 25% and 40% of their exports
respectively.
“Should
a suit be filed, Chinese manufacturers are sure to begin exploring markets such
as India, Indonesia and Chile to try to offset any potential damage,” said Wu
Hulian, editor of Sweeteners
China News. “But the EU and US markets are effectively irreplaceable -
if either market were to impose an anti-dumping duty, it would be a huge blow
to the Chinese sucralose industry.”
CCM
will continue monitoring this situation as it develops and will post regular
updates to Sweeteners
China News - our newsletter providing breaking news and expert
commentary on China’s sweeteners market.
For more information about CCM and our coverage of
sweeteners in China, please visit www.cnchemicals.com or get in touch directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.