India fears soda ash dumping by China

India fears that China, the world“s largest producer of soda ash, has started dumping the product into the Indian market as its exports to major markets such as the US and Europe have crashed due to …

India fears that China, the world“s largest producer of soda ash, has started dumping the product into the Indian market as its exports to major markets such as the US and Europe have crashed due to the global economic crisis. A jump in soda ash imports from China has alarmed producers in Gujarat as they account for nearly 95% of India“s production. In just three months, October to December 2008, soda ash imports from China of 49,018 metric tonnes have exceeded the amount it sold to India during the whole of financial year 2007-08. In the 1Q of the current fiscal, exports by China were normal and the monthly average of 3,416 tonnes was in line with exports made in the previous year. But the monthly average has jumped five fold in the 3Q to 16,339 tonnes. Domestic players allege that China is selling soda ash at below manufacturing cost. The Directorate General of Safeguards (DGS) has initiated an investigation against imports from China. The Alkali Manufacturers Association of India (AMAI), which counts Tata Chemicals, GHCL, Saurashtra Chemicals, Nirma and DCW among its members, has filed a complaint with the DGCI&S and has alleged that increased imports of soda ash from China have led to a disruption in markets and pose a serious threat to domestic industry. Y. R. Singh, executive director of AMAI, said that after the Olympic Games industrial activity China is facing a downturn. Moreover, the global recession has reduced the demand for soda ash. Projection of demand growth for the product has been revised downward to 5%-6% per annum from the previous 10%. This will reduce Chinese demand by around 2 million tons per year. On the other hand, production in China is on the rise. “China“s capacity for soda ash production in mid-2008 was around 22 million tons. Further addition of around about 5 million MT is in the pipeline. So total capacity in China is expected to exceed 27 million MT in 2010”, added Mr. Singh. He said that the association has requested imposition of a safeguard duty as well as quantitative restrictions on imports of soda ash, especially from China. “All exports from China, particularly exports of chemicals, plastics, textiles and toys largely depend on the US and Europe and these markets have taken a big hit. The case of soda ash is no different and therefore Chinese companies are now dumping their products in India”, said an official of Nirma Ltd.