Detergent prices to rise as chemical duty kicks in ANTI-DUMPING SAFEGUARD DUTY
Consumers are staring at a second hike in prices of detergents within a fortnight, with the government slapping an anti-dumping duty on a key input in manufacturing detergents.
While the first price hike, at the start of the 2017-18 financial year, was done in anticipation of the Goods and Services Tax (GST), the second one will be on account of the duty imposed on linear alkyl benzene (LAB).
On Monday, LAB, a chemical that constitutes 70 per cent of a detergent, was slapped with a $50 to $300 a tonne antidumping duty on imports from Iran, Qatar and China. In percentage terms, this works out to a five to 27 per cent duty slap on the price of LAB, currently imported at $1,100 a tonne.
Conversations with multiple detergent makers reveal that a price hike of about four to five per cent is in the offing, coming just after the April 1 round of a similar hike.
“This matter (slapping an anti-dumping duty) has been rushed through without fully taking into account our point of view," said Sanjay Trivedi, director, Indian Home & Personal Care Industry Association (IHPCIA), the apex body consisting of the country's top detergent makers, such as Hindustan Unilever, Procter & Gamble, and Ghari. “We are looking at all options, including appealing against the move in court,” he added.
According to Trivedi,
WHO GAINS
Chemical makers: Nirma, Tamilnadu Petroproducts, Indian Oil Corporation, Reliance Industries
WHO LOSES
Detergent makers: HUL, P&G, Ghari, and more, as well as consumers importing LAB is a necessity for detergent makers as there is a shortfall in supply of the input to the tune of 15,000 tonnes a month. “Demand of LAB is 55,000 tonnes a month. Domestic LAB manufacturers make only 40,000 tonnes a month. Detergent makers are left with no option but to import to bridge the shortfall,” he said.
The decision to slap the anti-dumping duty was pressed by domestic LAB makers Nirma and Tamil Nadu Petroproducts. Apart from the two, which have 16 per cent each of the domestic LAB market, there are two other LAB makers — Indian Oil Corporation and Reliance Industries — which control a significant share of the market.
In its final findings on March 6, the Directorate General of Anti-Dumping and Allied Duties, which functions under the commerce ministry, concluded that there was dumping of the chemical from these three nations and that this was undercutting and suppressing prices of domestic players. Delhi high court on Wednesday cancelled government clearances to Tata Housing Development Company Limited’s Camelot project, saying that the necessary permissions had been given without proper consideration of environmental and town-planning laws.
The high court held that the high-rise township in Greater Mohali fell within the catchment area of Chandigarh’s Sukhna Lake and the procedure for clearances had not been followed by the Punjab government and Nayagaon village panchayat. The Bench has, however, allowed the company to re-apply for permissions.
The issue was first considered by Punjab and Haryana high court after concerns over impact of the project on biodiversity and environment of the area (which includes Sukhna Lake and Sukhna Wildlife Sanctuary). The court sided with the company in August 2013 and allowed the project to continue.
The verdict was appealed in the Supreme Court, where petitioners said many politicians stood to gain from the project’s continuation. After considering the submissions, the apex court set aside the high-court order and transferred the case to the Delhi high court.
The company had agreed to status quo on project till disposal of the Delhi high court petition. After hearing arguments, the court reserved its judgment on October 9, 2015. If you reserve judgment on something, you refuse to give an opinion about it until you know more about it.