(Yicai) July 1 -- The impact of the European Commission's initial plan to levy anti-dumping duties on China-made erythritol is yet to be assessed but Sanyuan Biotechnology is already prepared to appeal, according to the major producer of the low-carb sweetener.

The outcome of the preliminary probe is not the final decision as the executive arm of the European Union will disclose its preliminary ruling on July 20, the Shandong province-based firm said to Yicai today.

The preliminary results show that the commission intends to impose provisional tariffs of nearly 52 percent on Baolingbao Biology and 106 percent on Dongxiao Biotechnology. Other firms may carry additional tariffs of almost 153 to 294 percent, and for Sanyuan the number is as high as nearly 157 percent. The probe began after the EC said in November that it received a complaint from Jungbunzlauer, a Swiss producer of natural ingredients.

The impact would be limited even though Sanyuan's sales overseas made up almost 77 percent of its total last year. The reason is that its exports to the EU accounted for just less than 19 percent of its total revenue in the year ended Sept. 30, 2023.

A source at Baolingbao told Yicai that the EC’s preliminary result tends to be final. The person added that Baolingbao’s erythritol exports to the EU are small so even if the region imposes an anti-dumping duty, the effect will be manageable.

China's demand for the low-calorie sweetener grew fast amid the Covid-19 pandemic, leading to an overcapacity. In 2022, added capacity equaled about five times the demand so prices slumped to CNY9,500 (USD1,310) per ton from CNY40,000 (USD5,500). However, the situation has improved since late last year.

Erythritol prices in Shandong have returned to around CNY13,000 per ton, Yicai learned. Thereby, Chinese producers improved their earnings in the first quarter, according to their interim reports.

Editor: Emmi Laine