China’s Citric Acid Producers Adjust Export Strategy

At present, China’s capacity to produce citric acid has already reached over 1.4 million t/a, accounting for around 80% of the world total, and actual annual output is 1.0 million tons, accounting for around 75%. China has more than 20 citric acid producers, the country’s largest citric acid enterprise has a capacity of over 300 thousand t/a. China's top ten citric acid enterprises, in terms of capacity and output, account for over 90% of the national total. In recent years, some of the world’s largest citric acid enterprises have suspended production due to operation and production troubles. For example, Tate&Lyle closed two plants in Britain and Mexico, Solaris shut down its plant in India, ADM closed its plant in Ireland, and Aktiva shut down its plant in the Czech Republic.
   Major citric acid producers in China include TTCA Co Ltd, Weifang Ensign Industry Co Ltd, Anhui BBCA Biochemical Co Ltd, RZBC Group Co Ltd, Jiangsu Yixing Union Biochemical Co Ltd, DSM Citric Acid (Wuxi) Ltd, Anhui Worldbest Bio-pharmaceutical Co Ltd and Fenhe Biochemical Co Ltd. Shandong province is currently the leading citric acid producer in China. The output and export volume of citric acid from the province each account for over 50% of the respective national totals.
   China is the world's largest exporter of citric acid. At the beginning of this century, China’s export volume of citric acid was 240 thousand tons. By 2005, it had doubled, reaching 480 thousand tons. The export volume exceeded 600 thousand tons in 2008, 650 thousand tons in 2009 and 700 thousand tons in 2010. In the last 7-8 years, the export volume has seen a double-digit annual growth. At present, China exports citric acid mainly to Europe, the U.S., Japan and Southeast Asia, etc.
   In recent years, trade friction in the international market has increased, and China’s export of citric acid to some countries has sometimes been blocked.
   In September 2007 the European Union (EU) launched a dumping investigation into citric acid and citrates originating from China. The companies involved include Anhui BBCA Biochemical Co Ltd, RZBC Group Co Ltd and TTCA Co Ltd. On June 3rd, 2008 the EU announced an initial ruling on citric acid and citrates originating from China. Under the initial ruling, the EU levied an antidumping tariff of 13.2%-49.3% for the Chinese enterprises involved. In particular, a provisional antidumping tariff of 42.2% was imposed on citric acid and citrates exported by Anhui BBCA Biochemical Co Ltd to the EU. The EU is China's largest export market for citric acid, and China’s share of that market is around 1/3.
   In April 2008, three large citric acid raw material companies of the U.S. – ADM, Cargill and Tate&Lyle – filed a petition with the U.S. Department of Commerce and the U.S. International Trade Commission on behalf of the U.S. citric acid industry to launch a dumping and subsidy investigation into citric acid and citrates originating from China. The U.S. Department of Commerce officially launched that investigation in the same year. In May 2009, it announced an antidumping and anti-subsidy ruling on imports of citric acid and citrates from China, and levied a related tariff on Chinese enterprises. Many countries such as Thailand, Ukraine, India, Egypt and South Africa have also launched dumping investigations into citric acid originating from China. Not long ago, Brazil also began dumping investigations on the import of citric acid from China.
   These dumping investigations have had a great impact on the export business of domestic enterprises, causing great operating pressure on China’s citric acid sector.
   First of all, Chinese citric acid enterprises should try to stabilize their traditional export market. Europe, Japan and Southeast Asia have been China's traditional citric acid export markets for many years. For the U.S. market, China’s exporters should not give up easily, but continue to maintain and expand market share. At the same time, Chinese enterprises have made efforts to open up new markets, and China’s export volume to Brazil, Mexico, South Africa, Korea and Russia has climbed. According to the statistics made by China Chamber of Commerce for Import & Export of Medicines & Health Products, China’s export value of citric acid totaled US$429 million in the first half of 2011, up 24.56% year-on-year. Among China’s export destinations, the top five countries with the largest growth of export value were Brazil, Mexico, South Africa, Korea and Russia.