Chinese citric acid imported into the US is subject to antidumping duties of between 94.61 and 156.87 percent, and countervailing duties (CVD) of 3.60 to 118.95 percent, in an attempt to avoid flooding the market with cheap citric acid and depressing prices for domestic producers. However, three major players in the US citric acid industry, Archer Daniels Midland, Cargill and Tate & Lyle Americas, have claimed that some Chinese companies are shipping their product to the US via Thailand, thereby avoiding the duties.
In a statement, the three companies quoted Corn Products China News, claiming that a securities consultant called Mr. Yuan at Chinese citric acid firm Anhui BBCA Biochemical Co., Ltd had told the publication: “In order to avoid anti-dumping duty and CVD in the US, Chinese citric acid producers usually make use of overseas traders with no anti-dumping or CVD cases in the US to export citric acid to the US.”
No one from Anhui BBCA Biochemical returned a request for comment prior to publication.
“These actions not only rob the US Treasury of significant revenues, but they also threaten the health of American citizens by rendering the source of an important food, beverage, and pharmaceutical ingredient untraceable,” ADM, Cargill and Tate & Lyle Americas said.
The three companies said that the request for an investigation into possible transshipment through Thailand could be just the first in a number of requests to the Department of Commerce, as they attempt to gather evidence of circumvention of duties via other countries including Israel, Indonesia, India, the Dominican Republic, Japan, Korea, and Taiwan.
Citric acid is a fermentation product, which means it can be made from a number of carbohydrate products including corn and sugar.
Both the United States and Europe have imposed duties on Chinese imports after complaints that domestic producers cannot compete with cheaper Chinese products.
However, the Chinese production process differs from that used in the US and Europe. Chinese fermentation requires raw materials from an early stage in the supply chain so Chinese manufacturers use the plant itself, such as corn, sweet potato or cassava. The Western fermentation method uses purer raw materials such as sugar, starch, dextrose or molasses, which are more expensive per carbohydrate unit.