According to EOD producers, during the past several years prices of EO remained over and above Rs 40,000 per mt, which should not be over Rs 26,000 per mt. At present EO available from the local producers at around Rs 42,000 per mt to Rs 48,000 per mt, as against the international prevailing prices of around Rs 26,000-28,000 per mt.

Ethylene oxide is highly explosive and hazardous gas and can not be transported from overseas. However, only for the medical purpose it can be imported and that too, restricted quantity. Due to this property of EO, manufactureres of EOD, have no option, but to buy EO from indigenous manufacturers, among them are IPCL (15,000 tpa), NOCIL (14,000 tpa), Reliance (24,000 tpa) and India Glycols (13,000 tpa).

EOD are mostly used in refineries, petrochemical plants, fertiliser plants, pharmaceuticals, dyes, paints, textile and a host of other industries.An industry source said, there is no shortage of EO in India since 1998, when domestic capacity increased to 1,70,000 mt. A leading EOD porducer said that, EO users should be given the commodity, at the international price for export production or atleast sell it at a reasonable price in the domestic market.

The derivatives producers further, allege that the petrochemical companies, whose margins on the Mono-ethalyene Glycol(MEG) are hemmed in by the import parity level, which tends to keep EO price unjustifiably high.

EOD producers say that, a window of export opportunity has been closed by the Director General of Foreign Trade (DGFT) notification no. 385-PN-92-97 dated 26th November, 1996. It has been denied the credit for customs duty of products, made from EO for export purpose ie. withdrawal of pass book credit toward EO consumption, on products where EO is used as a raw material. EOD producers fail to understand the reason for the same.

The total installed capacity in India for the manufacture of EOD is 1,70,000 mt per annum. Where as the domestic demand for EOD is around 1,50,000 mt per annum. However, domestic EOD manufacutures feels that they can and are in position to export 50,000 mt. But they are not able to do so. Among other domestic EOD producers, are Laffans Petro, Amines & Plasticiser, Vishuddh Rasayanee, Jaya Non-Ionics.

In fact, between Italy and India, there are no countries having any single plant manufacturing ethylene oxide. Already there is huge export market and it does not even require any marketing, in the various consumer countries.EOD producers said, "Nobody is looking at this hidden and readymade export opportunity that exists in the international market. At present, a ready export market is available in the other courntries - the Middle East, Africa, South Asian market. Further, we can give one example of SM Dyechem, which worked for six months in 1995, when EO prices had dropped to Rs 28,000 per mt. The company achieved an export level of $1 million. Coupled with other reasons, due to high pirces of EO, out of around 12 producers of EOD, more than half has shut-down their production in the last three years. As per the latest information, Shell, Union Carbide are both installing EOD plants in South Asia this year, but not in India. This will boost the competition in most of the South Asian markets and the domestic market will have to face cut-throat competition. Hence the industry feels, that not only a window of opportunity for exports worth $30 million has closed at the end of 2000. Hence, where is the department of chemicals andthe other associations, to look into this matter ?" was the question raised by the EOD producers.