Avebe slams Chinese restrictions on EU potato starch suppliers

20-Sep-2011 - Last updated on 23-Sep-2011 at 07:22 GMT

EU potato starch imports hit

Dutch potato starch supplier Avebe said it is investigating whether legal steps can be taken in response to China’s decision last week to stick countervailing duties on top of existing anti-dumping duties on potato starch imports from the EU.

China claims its year-long review found evidence that the imports from subsidized European companies hurt Chinese producers.

"According to the results of the investigation ... subsidies existed for EU-produced imports of potato starch and China's domestic potato starch producer suffered substantial damage related to those subsidies," said China’s Ministry of Commerce in a statement.

Importers of EU potato starch will pay duty of 7.5 to 12.4 % for five years, added the Ministry.

Chinese probe

The China Starch Industry Association asked the Ministry of Commerce to initiate an anti-subsidy probe into the EU potato starch exports in August last year, reports China Daily.

The investigation looked at whether the EU members subsidized exports of potato starch to China, and if so to what extent the subsidies had harmed domestic industries.

The Ministry’s preliminary ruling came out in May, and in April this year, China imposed anti-dumping tariffs ranging from 12.6 to 56.7 % on EU potato starch products.

Supplier's incomprehension

Johan Russchen, a spokesperson for Avebe, told FoodNavigator.com that the company “does not understand why this investigation was started” since the EU-subsidies in question were already set to be phased out next year.

He said that the supplier is evaluating legal options following the Chinese ruling.

John Clancy, European Commission trade spokesperson, in an emailed statement to this publication, also expressed disappointment at the action, confirming that the two EU support schemes countervailed will be completely discontinued by the middle of 2012.

The Common Agricultural Policy (CAP) has undergone a major overhaul in recent years so that the majority of all payments are now "decoupled", meaning that farmers no longer receive payments related to a specific type of production, he continued.

"No payments have been made under the third scheme (export refunds) for a number of years and none will be paid in the foreseeable future,” added the EU trade spokesperson.

China is the EU's second-biggest trade partner behind the US and exports to China from the bloc rose 8.4 % in 2010 to €113.1bn.

EU starch market impact

The Avebe spokesperson stressed the company's extensive global supply network, and said the impact of the Chinese duties on EU starch producers will depend very much on how overall market fundamentals play out.

Its potato-starch based Eliane products are used in everything from bakery cream and powdered soups to processed meat and mayonnaises.