The Hindu Business Line : Eucalyptus oil units for dumping duty on Chinese imports

THE eucalyptus oil industry in the Nilgiris has decided to approach the Union Government to impose an anti-dumping duty of 150 per cent on Chinese oil imports in a bid to save the domestic industry.

Eucalyptus oil producers and labourers in the region had gone on an indefinite strike from January 21 protesting against falling prices in the region.

The price of eucalyptus oil in the region in the recent past had gone down from around Rs 230-250 per litre to around Rs 190 per litre. Dealers cited import of Chinese oil at lower prices in major markets (like Mumbai) as reason for the pressure on prices.

Mr Shanthilal, Secretary, the Nilgiris District Eucalyptus Oil Dealers Association told Business Line that the strike had been called off, with the assurance from the trade that prices would not go below Rs 190 levels. "While the raw material may be free, producers are buying leaf at a cost of Rs 2.50 per kg. While prices may fall one cannot bring down the cost of leaf. Then there is the additional cost for plucking and distilling oil. The low prices is impacting the producers and labourers adversely," he said.

Mr Shanthilal said that currently Chinese oil is being imported at a landing cost of around Rs 140. Add to it the duty of 12 per cent plus your local taxes and the commodity is available around Rs 170.

"According to our feedback, the Mumbai traders have already imported around 200 tonnes of Chinese oil. Given that we have a domestic demand of 400 tonnes per annum, the quantum imported is putting pressure on prices," he said.

Mr Shanthilal said that the industry would also moot a complete ban on Chinese oil imports. Yet a section of the trade is of the opinion that given the cyclical nature of the commodity, this was bound to happen.

"The prices are a cause for worry, for poor off take would mean carry over stock, thereby depressing prices further. However, we are at the mercy of the demand and supply forces in the region," Mr G. Pannalal, Managing Partner of Jain Eucalyptus Oil Factory said.

He said that while competition was healthy, unfair competition is not conducive for good business. "One cannot deny that the interests of the ordinary distiller is disturbed due to these imports. As such some amount of protectionism is necessary," Mr Pannalal added.