Following a year-long investigation, the Chinese government yesterday imposed anti-dumping tariffs on potato starch imports from the European Union.

China's Commerce Ministry announced that its punitive duties would range between 17 percent and 35 percent.

"The move will save our industry from disaster," said Zhou Qingfeng, director of the Chinese commission on potato starch.

He quoted China's potato starch production capacity working at under 30 percent in 2005 due to low-priced EU products, but leapt to 60 percent last year following the preliminary ruling, showing the direct effect of such tariffs.

The price of potato starch rose from 4,600 yuan to 4,800 yuan per ton last year after the preliminary ruling, up from less than 4,000 yuan in 2005.

The uses of potato starch vary across a range of industries including food processing, pharmaceuticals, textiles and animal feed.

In December 2005, 17 Chinese starch manufacturers from Heilongjiang, Qinghai, Gansu and Yunnan provinces and the Inner Mongolia Autonomous Region filed a petition to the Commerce Ministry targeting their EU competitors. The petition alleged that the European players were flooding the Chinese potato starch market at low prices.

The Commerce Ministry began an investigation last February covering all imports for 2005.

Following a six-month investigation, which ended last August, the ministry moved to impose primary tariffs on European Union, with German, French and Dutch companies responding to the charge.

"It is China's first dumping charge against an agricultural product," a web statement by the ministry announced.

According to Zhou, the case will benefit millions of Chinese potato farmers across 12 provinces and autonomous regions. He gave the example of the average potato price that increased to 0.48 yuan per kilogram last year from 0.34 yuan in 2005.

An agricultural institution in Yunnan Province put estimated losses to local farmers at close to 120 million yuan had the anti-dumping charge not been imposed.

Zhou called on Chinese firms from other industries to further defend their interests following World Trade Organization rules.

As it stands, Chinese companies are on the receiving end of the most anti-dumping tariffs in the world, while seldom imposing similar duties on foreign rivals.

Zhou said his commission had been formed not only to handle the potato starch case but also to stand for "the whole industry in China."

(Source: China Daily February 6, 2007)