Anti-dumping Duty Application on Chinese-made Glyphosate Formulations Exported to Australia Unjustified

By C S Liew, Pacific Agriscience Pty Ltd., a supplier of farm chemicals into Australia

"In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market competition.” Source: Wikipedia.

The above definition is only complete when we have “like goods” in question. In this particular case where two Australian glyphosate formulators, Nufarm and Accensi, applied for anti-dumping duty to be imposed on Chinese-made glyphosate formulations based on those exported to Australia from Jan to Dec 2011 (AgroNews 2012-02-08), called the investigation period, there is little “like goods” for comparison.

The most common glyphosate formulations used by farmers in Australia are glyphosate 450, 510, 540 and now 570 whereas in the Chinese domestic market, farmers used mostly glyphosate 10% IPA salt derived from the “mother liquid” (waste material arising from the production of glyphosate Technical).

The minor formulations of glyphosate sold in Australia are 360 (41% w/w IPA salt) and 680 WDGs and those minor formulations sold in China are likewise a 41% IPA salt and some WDG formulations. So, only minor formulations overlapped in both countries. Therefore, on the surface, though small in quantity, there are some “like goods” for comparison. However, one needs to examine this subject of “like goods” deeper.

The active ingredient content may be similar for these minor formulations in both countries but the critical surfactants incorporated in these similar strength formulations are vastly different. In the 41% IPA salt formulations made by Chinese plants for sale into the Chinese market, they do not generally used ethoxylated tallow amine surfactants that are used by Monsanto and other Australian formulators. It is a well-known fact in Australia that surfactants play a critical role in the efficacy of glyphosate formulations under Australian farming conditions. All agronomists there can testify to this. Therefore, we can conclude here that even when there are seemingly some "like goods” in both countries, though these formed only a small amount of total glyphosate formulations used in both countries, they are indeed not “like goods” at all due to one critical component being vastly different that will result in completely different performance in terms of weed control.

Most glyphosate formulations exported to Australia from China are the standard 450 which are in compliance with APVMA standards and have the same ethoxylated tallowamine surfactant present at the needed strength.

Therefore, on the basis of “like goods” being not present in both countries, there is no justification in considering imposing an anti-dumping duty on Chinese-made glyphosate formulations exported to Australia.

As for the claim that surging Chinese-made glyphosate formulations have caused economic injury to the two applicants which might have employed well less than a couple of hundred people directly connected with the formulation, packaging, labeling and logistics of glyphosate, we have no doubt that this is the case but for Australia as a whole, the lower-cost of production in China has been a boon for the 140,000 Australian farms and farm economy. Australian farmers benefitted from the lower prices of glyphosate formulations coming from China. And this is a major input cost in many Australian farms, glyphosate being the largest agchemical used in Australia. Lower input costs contributed significantly to Australian grains and food being more competitive in the world markets. Unlike in the USA, Japan and the EU, Australian farming is not subsidized by the government and yet, Australian farmers compete very effectively in the world markets. 

Imposing an anti-dumping duty on Chinese-formulated glyphosate exported to Australia will effectively increase the cost of glyphosate to Australian farmers and will jeopardize the exports of Australian grains and food. Do Australian farmers and the government want to see glyphosate and other chemical input prices as high as those prevailing in these subsidized farming economies of Japan, the USA and the EU? No, I am sure.