CCM: USDC cancels anti-dumping duty on Meihua Bio’s xanthan gum 10-18-2016

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.


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