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Caustic soda industry bruised from cheap imports

06 Feb '10
2 min read

The caustic soda manufacturers are confronting a difficult phase on account of a fall of over 40 percent in the commodity prices during the past one year. Such decline in prices has occured due to the unexpected rush in low-priced imports of caustic soda from US and also languid domestic demand.

Prices of caustic soda have currently dropped to Rs 12,000-12,500 per ton from Rs 20,000-21,000 per ton during previous year. Several factors contributed to the extensive fall in prices of caustic soda, economical imports from US being major amongst them.

Due to the recessionary trends, US based manufacturers began to dump caustic soda in India at cheap rates. Caustic soda which was traded at around $500 to $600 a ton in international market was exported to India at the rate of $30 to $40 a ton due to withered demand in US.

With competitive global rates, import of caustic soda in India mounted to 100,000 tons a month as against the routine import of 10,000-15,000 tons. Confronted by low priced imports, the domestic traders were strained to reduce prices.

Startled by the condition, the caustic soda manufacturers went to the Union Commerce Ministry and pleaded for imposing a safeguard duty on imports of caustic soda. Government assented to it but, this being a quasi-judicial process, it took four to five months time by the time duty was imposed in December, but in the meanwhile, domestic prices were badly affected due to dumping.

Fibre2fashion News Desk - India

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