Chinese herbicide shipments into the U.S. more than tripled in a year
By MATEUSZ PERKOWSKI
The federal government has launched a preliminary investigation to determine if Chinese manufacturers have been dumping glyphosate, a popular herbicide, onto the U.S. market at unfair prices.
The investigation was prompted by a petition from Albaugh, Inc., a producer of generic glyphosate based in Ankeny, Iowa, which claims Chinese firms have swamped the U.S. market with the chemical since 2007.
"Dumped imports from China, driven by China's 'irrational' expansion of its glyphosate capacity over the past three years, are at the root of the problem," the petition said.
Albaugh's complaint will be investigated by the U.S. Department of Commerce and the International Trade Commission. The federal agencies determine if dumping has occurred and assess the injury to U.S. industries. If warranted, the federal government can then impose countervailing duties on the foreign product.
Shipments of Chinese glyphosate into the U.S. more than tripled between 2007 and 2008, from about 25,500 metric tons to 82,300 metric tons, according to Albaugh's estimate.
Chinese exports of the herbicide dropped to about 70,000 metric tons in 2009 only because major U.S. buyers, including Syngenta and Dow AgroSciences, have built up large inventories, the petition said.
These companies import the chemical in several condensed forms, then dilute the glyphosate with other ingredients and distribute the finished product to wholesalers, the petition said.
"As U.S. processors and resellers of dumped Chinese glyphosate acid, wet cake or salt, their U.S. operations are not only fully insulated from the impact of Chinese dumping, but they profit from it," according to Albaugh.
Representatives of Syngenta and Dow could not be reached for comment.
Since 2007, Chinese manufacturers have come to dominate more than two-thirds of the U.S. market for raw glyphosate, the petition said.
Within the U.S., price impacts were delayed because domestic producers were still under contract with buyers while exports climbed, according to Albaugh. Since then, however, U.S. companies have had to lower their prices or risk losing business.
"The present situation is not sustainable," the petition said. "The U.S. industry's most recent returns will not support continued investment in the business."
Chinese manufacturers expanded their glyphosate production capacity too aggressively when prices for the chemical were rising, the petition said. Between late 2007 and mid-2008, the value of raw glyphosate from China jumped from about $2.70 per pound to about $6 per pound.
Global consumption of the herbicide currently ranges from about 500,000 metric tons to 700,000 metric tons a year, but Chinese production capacity is expected to reach 900,000 metric tons in 2010, the petition said.
Albaugh expects that "China now has in place glyphosate supply capacity that will exceed the entire world's demand for glyphosate for the foreseeable future."