A 120% special tariff on export of yellow phosphorous (YP) and sharp increase in the base price (on which the duty is applicable) imposed by China last month will have a double impact on the phosphorous user industry in India.
China increased the export duty from 20% to 120% on YP from May 20, 2008. It also raised the minimum base price on which export duty is applicable from $4,000-$8000 per tonne.
As a result, import cost of YP (being elemental phosphorous used in various industries) in the country has doubled to $9,000 a tonne in just six-month time.
Landing cost of YP works out to Rs 400 a kg, which is double from Rs 200 a kg in last October. India annually imports about 25,000 tonne from China, that is 95% of the total requirement.
?This major development will adversely affect a number of chemical industries including the agrochemicals industry. Artificially increased high cost of imported yellow phosphorous will make manufacture of the intermediates unviable and the domestic industry will be forced to import these intermediates from China,? Ninad Gupte, cice chairman of Crop Care Federation of India told FE.
India has large production capabilities to manufacture compounds based on phosphorous. Farmers use various generic agrochemicals to protect their crops from various pests. One of the commonly used groups of agrochemicals, namely organo-phosphorous pesticides is based on use of various phosphorous compounds.
?As immediate implication, the cost of all organo-phosphorous pesticides will increase substantially burdening the Indian farmer,? he said.
India has large production capabilities to manufacture compounds based on phosphorous. To name a few, Phosphorous Penta Sulphide (P2S5), Phosphorous Trichloride (PCL3), Phosphorous Ox chloride, Phosphoric Acid, Trimethyl Phosphite (TMP), Diethyl Phosphite (DEP), Diethyl Phosphorochloridothioate (DEPCT), Hydroxy Ethyledene Diphosphonic Acid (HEDP) are produced in the country.
Compounds based on yellow phosphorous are used in various industries such as pharmaceuticals, agrochemicals, and lubricant additives, metal finishing, water treatment compounds, extraction agents and safety matches.