The Union finance ministry is likely to impose anti-dumping duty on choline chloride imported from China, Malaysia and Vietnam to eliminate difficulties caused to the domestic industry by the unfair trade practices of dumping.
Choline chloride is an organic compound and a quaternary ammonium salt, primarily used as an additive in animal feed. It is also used in pharmaceutical, food and oil and gas industries.
The Union commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has recently recommended imposition of anti-dumping duty on imported choline chloride ranging from USD 94 per tonne to US$ 315 per tonne after conducting investigation into alleged dumping of the product from these countries from April 1, 2018 to June 30, 2019. The probe was conducted by the DGTR following a complaint by domestic manufacturer Jubilant Life Sciences.
The complainant, a leading producer of choline chloride in India, sought imposition of anti-dumping duty on imports of choline chloride in all its forms from three nations as it is causing material injury to domestic manufacturers. It stated that anti-dumping duty will bring the imported product at par with one produced by domestic industry and ensure fair competition in the market.
Besides Jubilant, the other manufacturers of the product in the country include Balaji Amines Ltd, SDA Products, Supreme Chemicals Industries, Venvet Chemicals Pvt Ltd, Blue Cross Animal Healthcare Pvt Ltd, Salvi Chemical Industries Ltd and Meden Pharma Pvt Ltd.
The product has been sufficiently protected in the past 17 years by way of the earlier anti-dumping duty on European Union and China. No application was filed by the domestic industry seeking extension of previous duty which expired on December 20, 2017. Once the duty lapsed in December 2017 the imports once again began to increase not only from China but also from Vietnam and Malaysia.
The major exporters of Choline Chloride from China include Gangzhou Dazheng Animal Medicine Co. Ltd, Golden Higway Chemicals Ltd, Hebei Dahe International Trade Co Ltd, Liaonig Biochem Co. Ltd, Hubei Maxpharm Industries Co. Ltd., Qingdao Good prosper Imp. & Exp. Co. Ltd, Qingdao KFP Import & Export Co. Ltd., Shandong Jujia Biotechnology Co. Ltd, Shandong NB Technology Co. Ltd, Shandong Aocter Chemical Co Ltd., Shanghai Brightol International Co. Ltd etc.
Uni FZC (Malaysia) Sdn is a leading Malaysian exporter of the chemical while GHW (Vietnam) Co. Ltd and An Huy Company Limited are leading exporters of the product from Vietnam.
The DGTR noted that Vietnamese exporter being a pseudo Chinese manufacturer has procured liquid choline chloride from China, processed the same into dry choline chloride and exported it to India.
The domestic industry has enhanced its capacity for the chemical in 2017-18 before commencement of dumping. However, with commencement of dumping, the profits, cash profits and return on investment earned by the domestic industry turned negative, thus signifying that their ability to raise capital investment will get impacted if dumping persists, observed DGTR.
It concluded that the domestic industry has suffered material injury due to dumped imports from the countries.
“Decline in sales by the domestic industry as a result of increase in imports led to increase in inventory and consequently decline in production and capacity utilization. The imported product is significantly undercutting the prices of the domestic industry. Resultantly, the domestic industry was not able to increase its prices in proportion to the increase in cost of sales. Price suppression faced by the domestic industry led to decline in profits, cash profits and return on capital employed,” stated the commerce ministry’s investigation arm.
The finance ministry will take the final call to impose the duty.