China threatens Himachal’s rosin businessOctober 2nd, 2011 - 1:38 pm ICT by IANS
Shimla, Oct 2 (IANS) Cheap Chinese rosin, a solid form of resin obtained from pines and conifers, has flooded the Indian market and is threatening the profit margins of Himachal Pradesh’s rosin business.
China is supplying the solid or semi-solid viscous substance at much lower rates as compared to the Indian product. When the global demand for rosin nosedived following the recession in Europe, China started dumping its surplus stock in India, said an official.
State-run Himachal Pradesh Forest Development Corp (HPFDC) managing director S.B. Islam told IANS that imported rosin, especially from China, was badly affecting the Indian industry.
The state, one of the major players in rosin business in the country, is facing tough competition as the buyers are opting for the imported product.
“China is marketing rosin at much lower rates in the Indian market due to global recession. It has dumped its surplus stocks (in India),” he said.
The hill state annually produces around 6,000 tonnes of raw rosin extracted from pine trees, grown mainly in lower hills of Hamirpur, Una, Mandi, Solan and Sirmaur districts.
After processing the raw rosin, the HPFDC markets it and its extract - tarpaulin oil - used in the paint industry.
Trade representatives said the HPFDC was marketing rosin at Rs.118-135 per kg depending upon its quality. The Chinese companies were supplying it at Rs.25-30 less than the HPFDC rate.
They said Indonesia was also supplying rosin to Indian industries but China was the major supplier of imported product. Indonesian rosin costs around the same as the Chinese product, they added.
Both China and Indonesia have captured more than 50 percent of the Indian market, they said.
Mumbai-based rosin trader Vinod Mahindra said that after the global recession, China had dropped its prices in the Indian market.
“In February-March, China was supplying rosin at $3,300 (around Rs.161,000) per tonne, but these days its price is around $1,800 per tonne. China is the main player that regulates global prices,” Mahindra told IANS over phone.
Top quality rosin produced by the HPFDC was made available at Rs.137 per kg, excluding taxes and freight, while the Chinese product was priced at Rs.105 per kg, which included import duty, he said.
“Since the HPFDC is not following the global trend, it is ending up accumulating losses,” Mahindra said.
Trade representatives said the annual requirement of rosin in the country was 40,000-50,000 tonnes.
To clear its stocks, the HPFDC has now planned to conduct an auction. “We are going to auction half of the 700 tonnes of rosin at our plant in Nahan (in Sirmaur district) Oct 4,” Islam said.
He said last year the HPFDC got good rates due to low supply from China which was hit by floods.
“Due to floods, China failed to supply the rosin in India. We managed to sell 6,000 tonnes of it at Rs.138 per kg, earning a revenue of Rs.70 crore,” he added.
While in 2009 the HPFDC’s revenue from rosin sale was Rs.43 crore, it was Rs.32 crore in 2008.
The HPFDC’s processing plant in Nahan was set up by the British before independence.
Besides Himachal Pradesh, Uttarakhand, Jammu and Kashmir and north-eastern states also produce rosin.
(Vishal Gulati can be contacted at firstname.lastname@example.org)
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Tags: business china, chinese companies, chinese product, conifers, forest development, global demand, global recession, himachal pradesh, mandi, paint industry, pine trees, profit margins, rosin, shimla, solan, surplus stock, surplus stocks, tarpaulin, trade representatives, viscous substance