How Does the EU’s Anti-dumping Proceeding Against Lysine Products from China Affect the Feed Industry? Ⅲ

Effamall.com 11 Jun, 2024

According to Article 27 of the Anti-dumping Regulations of the People’s Republic of China, the Ministry of Foreign Trade and Economic Cooperation decided to conclude the investigation related to this case.

Twenty-two years ago, in my role as a strategic market consultant for a leading feed company, I extensively delved into researching market supply and demand, pricing dynamics, and conducting analyses on the disparities in production costs between domestic and foreign markets. This experience provided me with valuable insights into the underlying context and implications of this anti-dumping investigation and its subsequent ruling.

During that period, Chinese manufacturers grappled with higher production costs attributed to factors like technical proficiency, rendering them less competitive compared to foreign counterparts in terms of technology and cost-efficiency. Moreover, domestic lysine production fell short of meeting the demands of the feed and breeding sectors, heavily replying on imports to bridge the gap. Noteworthy engagement at the time included active participation from representatives of applicant companies, investigated enterprises, leading domestic feed and breeding entities, and import agents during public hearings.

The first anti-dumping case in China after joining the WTO marked a significant milestone. The comprehensive and meticulous ruling, shaped by investigation findings and pertinent regulations, symbolized the culmination of negotiations involving domestic manufacturers, three overseas counterparts, domestic importers, and major users.

The current EU anti-dumping investigation echoes the past Chinese case, with nuanced distinctions.?

METEX NOOVISTAGO’s challenges predominantly stem from internal factors—specifically, high production costs due to scale constraints and energy inefficiencies, impacting its global competitiveness. Additionally, the EU has a substantial lysine demand of 400,000 to 500,000 tons per year, mostly met through imports from China and partially from Korea, Indonesia, and the Americas. All the feed and breeding enterprises in the EU could potentially be impacted adversely if dumping is validated and punitive anti-dumping measures are imposed. After all, the feed and breeding industries have greater economic scale and influence than tens of thousands of tons of lysine.

Geopolitical considerations further shape this investigation, with the timing of METEX’s bankruptcy application and the anti-dumping complaint against Chinese lysine manufacturers potentially intertwining with Western narratives on China’s overcapacity concerns, adding layers of complexity to the probe.

Rumors suggest active responses from the concerned Chinese enterprises and extensive legal involvement, indicating forthcoming developments and stakeholder reactions. Overseas manufacturers have progressively lost their market positions over the past decade, and it remains uncertain if they can grasp this last straw of anti-dumping investigation to survive and prolong their existence. The final outcome may not change significantly even if they manage to survive in the short period.

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