Anti-dumping: Will Tate & Lyle pull the trigger on Chinese sucralose?

Chinese manufacturers have been exporting more and more sucralose this year at increasingly cheaper prices, a practice that will increase the danger of an anti-dumping suit. 

According to China Customs data, sucralose exports from the country were up 8% year on year during the first-half of 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 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 favourable’ 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 centre all its sucralose production on 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 favourable 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​ is a leading market intelligence provider for China’s sweeteners market​​