ITC: Xanthan Gum Imports Threaten U.S. Market

WASHINGTONImports of the fermentation product xanthan gum from China threaten the United States industry "with material injury", the U.S. International Trade Commission (ITC) announced last week.

Earlier this year, the U.S. Department of Commerce (DOC) found imports of xanthan gum from Austria and China were being sold below "fair value", constituting "dumping", and the agency announced preliminary anti-dumping tariff margin rates against Chinese and Austrian xanthan gum exporters covering imports of the product into the United States.

Atlanta-based CP Kelco, whose product lines include xanthan gum, explained earlier this year that the margin rates reflect the extent to which the Austrian and Chinese companies priced their products below fair market value. ITC found the Chinese companies guilty of selling xanthan gum between 15% and 154% below fair market value in the United States, CP Kelco said.

The ITC, a quasi-judicial federal agency, said it would impose antidumping duty orders on imports of xanthan gum from China. However, ITC's six commissioners found the Austrian imports didn't injure or threaten to harm the U.S. market.

We want to thank officials of the USITC for their confirmation and diligent investigation.  This verdict is a positive step to establish fair market trade of xanthan gum in the United States, sa E. Charles Bowman, Vice President of Marketing for CP Kelco, in a statement released to Food Product Design. Producers, and more importantly consumers, are becoming more educated and aware of the role raw materials and ingredients play in food and beverage products."

Deosen, an Asia-based xanthan gums manufacturer that was investigated by the DOC and ITC, was disappointed in the ITC's decision.

We want to point out that the ITC accepted our arguments that the petitioners (CP Kelco) claims were invalid, agreeing with our assertion that past imports of Chinese xanthan gum were not a cause of material injury to the domestic industry. Rather, the ITC found that Chinese xanthan gum constituted merely a threat of future material injury," Lawrence Herbolsheimer, CEO of Deosen USA, Inc. and Deosen Biochemical, Ltd., said in a statement today.

Deosen contended the decision represented a setback for U.S. consumers, "who will have to pay more for products that contain xanthan gum."

A fermentation product used to thicken and provide stability to water-based solutions, xanthan gum is used in food and beverage products, pharmaceuticals and consumer goods, among other things, according to the ITC. Last year, imports of xanthan gum from Austria and China were valued at an estimated $30.5 million and $82.4 million, respectively, the agency said.

The ITC's report on the dumping investigations will be available for public inspection after July 23.