Rubber input makers seek protection

While natural and synthetic rubber prices are on a roll, chemical intermediaries used in the processing of rubber are facing rough weather. 

So much so, the Directorate General of Safeguards has initiated investigation into imports of rubber chemical PX-13. The probe is being done after a year’s gap. Officials say safeguard investigations are sensitive, since they are imposed on bonafide imports (bought under proper channels) and not dumped ones. The investigations can only be done if there is material evidence suggesting serious injury to the Indian manufacturer. 

Nocil, the largest manufacturer of rubber chemicals, with 70 per cent of market share, has asked for imposition of safeguard duty for three years on the rubber chemical, extensively used in treating natural rubber, synthetic rubber and other synthetic rubber-based compounds. 

Industry sources said the high margin earned by rubber manufacturers has been partly due to the low cost of raw materials, most of which is imported. Many countries, including the US, China and Saudi Arabia have excess supply and lean domestic market conditions, forcing companies in these countries to sell at a cheaper rate. Therefore, even if rubber spot prices have shot up in the domestic market, chemical intermediaries are not benefiting. 

Besides, the directorate general of foreign trade (DGFT) has begun investigations on pleas for anti-dumping duties on two basic organic chemicals widely used for rubber processing, among its other uses (in making drugs, pharmaceuticals, dyes and dyestuffs, too), acetone and aniline. Gujarat Narmada Fertiliser Corporation has sought a review for the former, to continuw the anti-dumping duty imposed in 2006 for another five years. For acetone, the DGFT is probing on a representation from Hindusthan Organic. 

Dumping is defined as an unfair trade practice, with goods exported to another country at a price lower than its normal value. Thus, anti-dumping, as approved by the World Trade Organisation, is a measure to restore fair trade by imposing an additional duty on the imported good to remove the price anomaly between these and domestic products.

In 2010, new duties were imposed on 26 items, mostly on industrial chemicals. On most, the duty was imposed for five years.