Summary: The USDC canceled the anti-dumping
duty levied on xanthan gum which Meihua Bio exported to the US, widening the
difference of anti-dumping duties between China’s xanthan gum enterprises. CCM
believes that this may boost the internal cooperation of enterprises.
On 20 May, 2015, Meihua Holdings Group Co.,
Ltd. (Meihua Bio) released the final decision on anti-dumping of its xanthan
gum. In order to protect the self-interests, in H2 2013, Meihua Bio applied to
the United States Department of Commerce (USDC) for a review on the original
judgment that the USDC will levy 15.09%-154.07% anti-dumping duty on China’s
xanthan gum. After over two years’ investigation, on 18 May, 2015, the
International Trade Commission (ITD, USDC) made a final decision, indicating
that Meihua Bio and its subsidiaries do not sell xanthan gum at the price which
is lower than the normal. This means that Meihua Bio has no anti-dumping
measures on xanthan gum. Therefore, the USDC cancel the anti-dumping duty on
Meihua Bio’s xanthan gum.
It is a great loss for both Chinese
enterprises and China that the USDC levies anti-dumping duty on China’s xanthan
gum. On one hand, the US is the major export destinations of xanthan gum in
China; the export volume of xanthan gum China exporting to the US accounts for
about one-fourths of the total. The levy of anti-dumping duty changes the
pattern of xanthan gum export destination in China. Without price advantages,
some small enterprises are forced to give up the American market. On the other
hand, high anti-dumping duty forces enterprises to increase their export price;
therefore, downstream customers are likely to purchase low-priced and
low-quality substitute, guar gum. India and Pakistan are two largest producers
of guar gum in the world.
In 2013, the USDC accepted the request from
the American largest xanthan gum producer, CP Kelco, to conduct anti-dumping
investigation on China’s xanthan gum. On 20 June, 2013, the ITD, USDC finally
affirmed that the xanthan gum imported from China threatens or damages related
industries in the US and the US will levy 15.09%-154.07% anti-dumping duty on
China’s xanthan gum.
Export volume of China's xanthan gum,
2009-2014
Source: China Customs
After the USDC canceling anti-dumping duty
on Meihua Bio’s xanthan gum, Meihua Bio will enjoy more significant advantage
in export. It is disclosed that now the difference between the anti-dumping
duty rate on Meihua Bio's xanthan gum and Chinese general one reaches 154.1%.
This provides capital strength for Meihua Bio to exploit the American market
with lower export price. CCM believes that the high duty difference between
Chinese xanthan gum enterprises may advance their cooperation. For example,
those enterprises levied higher anti-dumping duty will sell their products to
those with lower anti-dumping duty and the latter will export these products
instead. Finally, they achieve the win-win situation. For Meihua Bio, since the
US demands a large quantity of xanthan gum, it cannot satisfy the demand only
by itself. Through cooperation, the popularity of Meihua Bio will also be
greatly promoted. For those enterprises which have been levied a high
anti-dumping duty, the export costs will be also reduced through the
cooperation.
About CCM:
CCM is the
leading market intelligence provider for China’s agriculture, chemicals, food
& ingredients and life science markets. Founded in 2001, CCM offers a
range of data and content solutions, from price and trade data to industry
newsletters and customized market research reports. Our clients include Monsanto,
DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
For more
information about CCM, please visit www.cnchemicals.com or get in touch with us
directly by emailing econtact@cnchemicals.com or calling
+86-20-37616606.