• The Vietnamese Government could increase import duty on Chinese HFCS (High Fructose Corn Syrup).
  • We therefore think Vietnam’s HFCS imports will reduce and the corresponding demand will switch to sugar.
  • This should have a positive impact on Vietnam’s sugar market, as it will help ease their large refined sugar stocks.

Vietnam’s Anti-Dumping Investigation on Chinese HFCS   

  • On 21st May 2020, the Vietnamese Government received dossiers requesting that restrictions were placed on HFCS imports from China and South Korea.
  • Between 2010 and 2020, Vietnam has initiated 14 trade remedy cases against China, nine of which got confirmed, and the other five still under investigation.
  • Statistically, we think it’s likely that Vietnam will increase import tariffs on Chinese HFCS.
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  • Temporary AD (anti-dumping duty*) can be imposed within 67-150 days, and Vietnam has the right to claim AD duty 90 days before the issuance of the temporary measure.
  • In theory, this means the Chinese HFCS into Vietnam can be levied with high import duty from July.
  • We think the HFCS importer may not want to take that risk.

*An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.

How Much HFCS Has China Exported to Vietnam?

  • China exported 97k tonnes of HFCS between January and May 2020; this is a year-on-year (YoY) increase of 10%.
  • Vietnam became the top destination for Chinese HFCS exports in 2018, receiving over 50% of their exports.
  • The Philippines used to be the top destination back in 2017, but it then levied heavy tax* on HFCS-containing beverages.
  • The tax switched the domestic consumers’ interest back to sugar and Chinese HFCS exports therefore reduced from 547k tonnes in 2017 to 303k tonnes (45%) in 2018.
  • Similarly, we could now see a reduction of HFCS exports to Vietnam and an increase in Vietnam’s domestic sugar demand.
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*The Philippines’ Tax Rate: 6.00 Philippine pesos per litre for beverages sweetened with caloric or non-caloric sweeteners (except high-fructose corn syrup) and 12.00 Philippine pesos per litre for beverages sweetened with high-fructose corn syrup.  

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  • The tariff on Chinese HFCS imports is currently zero under the China-Asean Free Trade Agreement (CAFTA).
  • The requester proposed 36.09% AD duty on Chinese HFCS.
  • In this case, HFCS’ landed value will be US$133 higher than the domestic sugar price, making imports unviable.

What Does This Mean for the Sugar Market?

  • This is good news for Vietnam’s domestic sugar market because refined sugar stocks in Vietnam are quite high now, as mentioned here.
  • Some additional demand switched from HFCS should help resolve part of the stock pressure.
  • On the contrary, this isn’t such good news for the Chinese sugar market.
  • Any unsold HFCS must go back onto the Chinese domestic market and it has a price advantage over white sugar.
  • The current price difference between sugar and HFCS (F55* sugar equivalent) is around RMB2000 per tonne.
  • But the volume would be too small compared to China’s 14.5m tonne sugar consumption to make a significant impact.
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Rosa Li

Rosa graduated from Jinan University in 2012 with a bachelor’s degree in Marketing. Rosa joined CZ in 2014 and has been an analyst for 7 years in our Guangzhou office managing the data capture, analysis and visualisation within the Chinese sugar markets utilising her skills in SQL, Python and VBA while also providing content for our platform CZ App. Rosa is also responsible for the localization of CZ App in China – CZ App WeChat, she also assists with the commercial marketing in China and works towards strategy with the trading team.

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