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Citric Acid Wars: The Last Anti-Dumping Claim

What is the common between an ice-cream and a bath bomb? A world-famous ingredient that was first isolated in 1784 by the chemist Carl Wilhelm Scheele and has been used in beverages, food, detergents and other applications such as cosmetics and pharmaceutics ever since.

The Ultimate Ingredient

Citric acid exists in a variety of fruits and vegetables. Citrus fruits such as lemons and limes have particularly high concentrations of the acid, up to 8% of the dry weight of the fruits. In fact, a couple of centuries ago the citric acid was crystallized exactly from lemon juice. However, nowadays a way more effective production technique is used. It includes feeding cultures of the mould Aspergillus niger on a sucrose- or glucose-containing medium.

The source of sugar is corn steep liquor, molasses, hydrolyzed corn starch, cassava or another inexpensive sugary solution. After the mould is filtered out of the resulting solution, citric acid is isolated by precipitating it with calcium hydroxide to yield calcium citrate salt, from which citric acid is regenerated by treatment with sulfuric acid, as in the direct extraction from citrus fruit juice.

Thanks to its remarkable physicochemical properties and environmentally benign nature, the use of citric acid across several industrial sectors increased rapidly throughout the last century. The pharmaceutical company Pfizer began industrial-level production using this method in 1919. Ten years later there was another player on the market – Citrique Belge. Gradually, new and exciting potential uses of the acid were found and therefore the volume of the production kept on growing.

Citric acid, also known as E330 within the EU, is a strong edible acid used as a flavouring and preservative in soft drinks, candies but also other types of food and beverages. It is the emulsifying agent that keeps fats in ice cream from separating. In combination with sodium bicarbonate, citric acid can be found in disintegration formulae such as vitamin tablets or bath bombs.

By chelating the metals in hard water, citric acid lets soaps and laundry detergents produce foam and work better without need for water softening. Among the other products whose effectiveness was improved via using citric acid are dishwashing tabs, shampoos, bathroom and kitchen cleaning solutions, chemical peels and so many more.

In just a century, the citric acid became extremely popular with its “magical” properties in a wide range of products. Imagine: the ultimate ingredient improving all aspects of our lives was finally discovered. The industry developed into a worldwide multi-million business.

The Citric Acid War

2001 was crucial for the European citric acid production business. It became clear that ten years earlier – in 1991 – a secret agreement between main citric acid manufacturers was made. After a careful investigation which started in 1997, the European Commission decided to fine Hoffmann-La Roche AG, Archer Daniels Midland Co (ADM), Jungbunzlauer AG, Haarmann & Reimer Corp and Cerestar Bioproducts B.V. a total of € 135.220.000 for participating in a price-fixing and market-sharing cartel.

Around the same time, at the beginning of the new century, Europe was flooded with cheap citric acid produced in China. This lead to bankruptcy for almost all of the European companies and closure of main citric acid plants in 2005. The only ones who survived the crisis were Jungbunzlauer and the pioneer Citrique Belge. Although the damage was already done, in 2007 the European Commission started a slow, long and complicated anti-dumping investigation against several manufacturers from China. In the meantime, the trade was going on and the European market kept on having unfair conditions and 50% of the world’s citric acid was produced in China.

A curious fact is that the cheap Chinese citric acid flooded not only Europe but also the U.S. However, the scenarios are quite different – the American government quickly took measures against the import of the acid as there were clear signs of dumping. In the China investigation, mandatory respondents were TTCA Co., Ltd. (a.k.a. Shandong TTCA Biochemistry Co., Ltd.) and Yixing Union Biochemical Co., Ltd., who received final dumping rates of 129.08% and 94.61%, respectively. Eleven Chinese exporters qualified for a separate rate of 111.85%. All other exporters received the China-wide rate of 156.87%.

Ten years later, the world of citric acid is yet to become a battlefield again. All of this has happened ten years ago and one may think that there are already enough regulations and restrictions in order for things to be calm. However, even nowadays the world of citric acid is a battlefield. A couple of months ago – in May 2018 – the U.S. Department of Commerce found dumping of imports of citric acid and certain citrate salts from Belgium, Colombia, and Thailand.

Right after the Chinese were officially banned from the U.S. market, three citric acid plants were constructed in Thailand in a relatively short period. The Department of Commerce found out that exporters from Belgium, Colombia and Thailand have sold citric acid and certain citrate salts in the United States at 19.30%, 28.48 %, and 15.71% less than fair value, respectively. This means Citrique Belge now takes place in the accused dock after they fell victim to the same offence 10 years earlier.

There was another, separate anti-dumping claim against Jungbunzlauer Canada. Further investigation by the Department of Commerce determined that the weighted-average dumping margin for merchandise produced and/or exported by Jungbunzlauer is zero.

The Sirius Effect

It won’t be an exaggeration if we say that there are ongoing anti-dumping claims all the time. At any moment, somewhere in the world of citric acid, there is a petition signed or an investigation conducted. Unfortunately, the bureaucratic methods are slow and very complicated. This makes them last for years.

At Sirius, we can always keep a good price as we are constantly monitoring the markets worldwide. Your business is protected from non-winning deals if you choose to work with us. No matter if you need affordable or fair citric acid, we know where to find it. The only thing you need to do is to give us a call today.

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