Regain Saccharin Market

Saccharin as the first product in China that suffered from dumping investigation in overseas markets completely lost the US market after the imposition of antidumping tax by the United States in 2003. With the great efforts made by both enterprises and lawyers, the US Ministry of Commerce has recently revised its preliminary ruling. Chinese enterprises have therefore regained the US market.    The US Ministry of Commerce announced on February 6th, 2006 that it had made a final ruling after the administrative reevaluation on saccharin from China and partial antidumping tax is lifted. Shanghai Fuxing Chemical Co., Ltd. has gained a tax rate of 17.05% and the tax rate for other companies is 329.33%. Products from Shanghai Fuxing Chemical Co., Ltd. can therefore get into the US market at a relatively low tax rate.

Undue dependence on overseas markets

China is the largest saccharin producer and exporter in the world. 70% - 80% of the output is supplied to overseas markets. The actual output of saccharin in China was around 27 thousand tons in 2004, accounting for more than 80% of the world total. The export amount in 2004 was 19.27 thousand tons, accounting for around two thirds of the global saccharin market volume. Major buyers in the international market are large multinationals such as Coca Cola, P&G and Colgate.    With the impact from antidumping activities, the export of saccharin in China has presented a declining trend in recent years. According to customs statistics, the export amount was 15 102 tons in 2005, a drop of 21.63% from the previous year.    The saccharin trade in China is also rather concentrated. The top 10 countries for the export of saccharin in China in 2005 included India, Germany, Korea, Spain, Brazil, Japan, France, Argentina, Britain and Indonesia. The amount exported to these countries was 9 032 tons, accounting for 59.81% of the national total.

One antidumping activity after another

It was in 1979 that saccharin produced in China suffered the first dumping investigation. It was launched by the European Economic Community. It was also the first time for China to meet dumping investigation in overseas markets. As China was unfamiliar to the antidumping system at that time, relevant departments did not pay enough attention to the case and no Chinese enterprises made response.     PMC of the United States also lodged a complaint against Chinese saccharin export enterprises in 1993. The United States launched dumping investigation. The US Ministry of Commerce used Indonesia as substitute. The final ruling is that an antidumping tax of 160.68% - 276.62% was imposed on Chinese enterprises. After great efforts made in demurrer, a revision to the final ruling was made to the favor of Chinese enterprises. PMC of the United States lodged a complaint once again on August 22nd, 2002. The United States launched another dumping investigation. (CCR2002, No. 35) The final ruling was issued on May 20th, 2003 and an antidumping tax at different rates of 232%, 198%, 79% and 363.22% was imposed on different Chinese enterprises. As a result, saccharin produced in China completely lost the US market. No saccharin produced in China has been exported to the United States ever since January 2004. Chinese saccharin producers have an even harder time.    That was not the end of troubles. On July 4th, 2005 the Dumping Investigation Bureau of the Indian Ministry of Commerce and Industry announced that it would launch dumping investigation into saccharin from China and the investigation duration was from January 1st, 2004 to December 31st, 2004. The dumping extent with the structural price as the normal value was 141.71%.

Antidumping triggered by price reduction

Analysts point out that the price reduction resulted from unhealthy competition is the major cause for the repeated antidumping cases suffered by Chinese saccharin producers.     China is the largest saccharin producer and exporter in the world. The total output in other countries except China such as the United States and Korea is around 6 thousand tons. The demand of saccharin in the international market is relatively stable. To pursue their own maximum interests, however, domestic saccharin producers have overestimated the saccharin demand in the international market and induced unduly high output and oversupply in recent years. It has not only reduced the economic performance in enterprises but also deviated from the policy of the state for restricting saccharin production and sales. The five domestic saccharin producers with the biggest export value have had very fierce price competition between each other for long years. Using price to gain market shares has become the main method for competition in saccharin producers. Due to the low export price, saccharin has always been the focus for dumping investigation.