The Authority has noted that increase in cost of sales was more than the selling price leading to a decline of profits of the domestic industry.

G. Srinivasan

New Delhi, June 14

THE Designated Authority in the Commerce Ministry has initiated a mid-term review of the definitive anti-dumping duty it imposed in November 2003 on imported soda ash from the European Union (excluding France), Indonesia and Chinese Taipei.

In a recent initiation notification, the Authority said that it has received an application for a mid-term review from one of the importers Hindustan Lever Ltd (HLL), which has substantiated the need for such a review.Caustic soda is an inorganic, soapy and robustly alkaline odourless chemical that finds application in multifarious fields such as manufacture of pulp and paper, newsprint, viscose yarn, staple fibre, aluminium, cotton, textiles, toilet and laundry soaps, detergent, dyestuffs, drugs and pharmaceuticals and petroleum refining, among others. Even as caustic soda is produced in two forms viz., Lye and solids, the present probe covers all forms of caustic soda.

Adducing the factors that have altered the conditions of both dumping and injury substantially, the applicant for review states that the prices of caustic soda has increased by about 56 per cent during 2005 from 2004 and the prices of chlorine has also risen by 62 per cent during the same period. This resulted in a huge profit to the chlor alkali industry as the cost has gone up marginally.

In the original investigation, the Authority has noted that increase in cost of sales was more than the selling price leading to a decline of profits of the domestic industry. This situation no longer holds now as the profitability of the chlor alkali industry as a whole has increased.

Besides, the customs duty for the subject goods has been reduced from 35 per cent during 200-01 to 15 per cent during 2005-06 which itself is a cause for change in circumstances, warranting a review. Despite reduction in customs duties, the profitability has continued to increase, implying that the domestic industry is not suffering injury due to alleged dumping.

Pointing out that the reference price recommended by the Authority and imposed by the Revenue Department subsequently was in the range of $271.46 to $258.48 per tonne, the applicant contends that this reference price itself is redundant since the import price during the period of probe is higher than the reference price imposed in the investigation.

Hence, the applicant claims that the imports from subject countries are not being dumped into India and pleads for a mid-term review.

The Authority, accordingly, has initiated a mid-term review and the period of investigation for this purpose is January 1, 2004 to December 31, 2004 but the injury analysis should cover the years 2001-02. 2002-03 and 2003-04 as also January to December 2004.

(This article was published in the Business Line print edition dated June 15, 2005)
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