BEIJING -- In what could be a serious blow to the Thai sugar industry, China said on Monday it will impose hefty penalties on sugar imports in the first ruling to come out of a months-long anti-dumping probe, a victory for domestic sugar mills struggling against cheap imports from Thailand and Brazil.
The world's biggest sugar importer said it found rising imports "seriously damaged" China's domestic industry.
Beijing will levy an extra 45% duty on top of the current 50% duty for out-of-quota sugar imports for this fiscal year, China's Commerce Ministry said in a statement. The duty will be eased to 40% in the following year and 35% a year later.
The ruling was in line with a proposal drafted in April.
The special duties will be a blow to top growers -- especially Thailand. In the most recent 2016-17 season, the country produced 10 million tonnes of sugar from 93 million tonnes of sugar cane. Thailand is the world’s second-largest sugar exporter, while China is the country's fifth most important export market, following Indonesia, Myanmar, Cambodia and Japan.
According to the Ministry of Commerce, however, the value of Thai sugar exports to China in 2016 declined almost 60% compared to the previous year, dropping from $341.79 million to $144.18 million - a figure that partly reflects a drop in the market price of sugar in 2016. This year, the price has rebounded.
The total value of Thailand's sugar exports in 2016 was $20,850.13 million, with China accounting for 4.34% of the total.
Thailand has previously faced criticism, particularly from rival exporter Brazil, over its subsidies to sugar producers. Producers in China regard the new tariff as a necessary offset to artificially cheap imports. The new penalties will boost a domestic sector that has struggled with rising farm costs and cheap arrivals, analysts said.
The new duties will not affect the 1.94 million tonnes of sugar imports that China currently allows at a tariff of only 15% as part of its commitment to the World Trade Organization.