Metronidazole which is currently priced around Rs 350 per kg is expected to advance towards Rs 500 per kg or more as the anti-dumping directorate has recommended imposition of anti-dumping duty on its imports from China which has been creating havoc in the domestic market by slashing its export prices.Once the union ministry issues the necessary notification the new duty structure will come into operation for such imports from China. Metronidazole is a chemical used in the manufacture of anti-diarrhoeal and some other drugs.There are five domestic producers of this chemical. However two of them, Advent Pharmaceuticals and Arey Drugs were forced to close down their plants, following the substantial inflow of cheap metronidazole from China.Three others - Aarti Drugs Ltd, JB Chemicals & Pharmaceuticals Ltd and Unichem Laboratories have been struggling for their survival. Their aggregate production is placed around 1,200 tonnes per annum.
Of them, the largest producer is Aarti Drugs with a capacity of about 800 tonnes per annum.
China started its entry into the Indian market some four-five years ago. It was then quoting about US$10 per kg. It first reduced its price to US $9.52 per kg in 1996-97 and pushed into the Indian market about 149 tonnes of this chemical. In each of the succeeding years it continued to slash its prices and step up its exports. Thus the price was brought down by it to US$6.56 per kg in 1998-99 and the supply wals jacked up to 379 tonnes.
In the current year, China cut its price further to US$5.34 per kg and dumped into the Indian market about 278 tonnes of metronidazole in the first 10 months of the current year. Some cheaper supplies which may still be in the pipeline may come in, but once the notification is issued by the finance ministry all such imports will stop. No other country has been selling this chemical at such ridiculously low prices, indicating that China was resorting to dumping, pushing domestic producers to the wall. The anti-dumping directorate is understood to have recommended that the difference between the landed cost and Rs 519 per kg should be charged as anti-dumping duty in respect of imports from China.
Thus the price should gradually move in that direction. No other country is offering metronidazole below this level. Currently the landed cost of Chinese metronidazole works out at just around Rs 310 per kg.
The anti-dumping department is said to have taken the view that the normal value of metronidazole was US$10.35. Had such dumping continued for some more time even the three remaining domestic producers would have been in serious trouble. Timely action by the anti-dumping directorate might now enable all domestic units to operate in a more congenial atmosphere.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.