Council Regulation (EC) No 1683/2004 of 24 September 2004 imposing a definitive anti-dumping duty on imports of glyphosate originating in the People's Republic of China
Date: 2004-09-24
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, anti-dumping legislation, herbicide, originating product

30.9.2004

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Official Journal of the European Union

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1683/2004

of 24 September 2004

imposing a definitive anti-dumping duty on imports of glyphosate originating in the People's
Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1)
(the
basic Regulation), and in particular Articles 11(2) and 11(3)
thereof,

Having regard to the proposal submitted by the Commission
after consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Measures in force

(1)

In February 1998 the Council, by Regulation (EC) No
368/98 (2),
imposed definitive anti-dumping measures
(the original measures) in the form of a duty of 24 %
on imports of glyphosate originating in the People's
Republic of China (the PRC). That Regulation was
amended by Council Regulation (EC) No 1086/2000 (3)
which increased the duty to 48 % following an anti-
absorption investigation pursuant to Article 12 of the
basic Regulation. Subsequently, following an anti-circum-
vention investigation pursuant to Article 13 of the basic
Regulation, Council Regulation (EC) No 163/2002 (4)
extended the 48 % duty imposed on imports of
glyphosate originating in the PRC to imports of
glyphosate
and Taiwan
(whether declared as originating in Malaysia or Taiwan
or not), with the exception of those produced by one
named company in each of these countries.

from Malaysia

consigned

2. Initiation of expiry and interim review investigations

(2)

Following the publication of the Notice of impending
the anti-dumping measures applicable to
expiry of
imports of glyphosate originating in the PRC (5),
the

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 461/2004 (OJ L 77, 13.3.2004, p. 12).

(2) OJ L 47, 18.2.1998, p. 1.
(3) OJ L 124, 25.5.2000, p. 1.
(4) OJ L 30, 31.1.2002, p. 1.
(5) OJ C 120, 23.5.2002, p. 3.

(3)

(4)

(5)

(6)

Commission received on 18 November 2002, a request
to review these measures pursuant to Article 11(2) of the
basic Regulation.

(EGA)

The request was lodged by the European Glyphosate
Association
of
producers representing a major proportion, in this case
more than 90 %, of the total Community production of
glyphosate.

applicant)

behalf

(the

on

the level of

The request was based on the grounds that the expiry of
in the conti-
the measures would be likely to result
nuation or recurrence of dumping and injury to the
Community industry. Moreover, on the basis of
the
the Commission
evidence contained in the request,
the measure was not
considered that
sufficient to counteract the injurious dumping practices,
which justified the ex officio initiation of a full interim
review of the measures encompassing all aspects of the
proceeding. Having determined, after consulting the
Advisory Committee, that sufficient evidence existed for
the initiation of an expiry and an interim review
pursuant to Articles 11(2) and 11(3) of the basic Regu-
lation, the Commission published a Notice of initiation
of these reviews in the Official
the European
Union (6).

Journal of

3. Parties concerned by the investigations

the Chinese exporting producers,

The Commission officially advised the authorities of the
PRC,
the producers,
importers and users in the Community which were iden-
tified in the request as being concerned, as well as their
the investigations.
associations, of
Interested parties were given an opportunity to make
their views known in writing and to request a hearing
within the time limit set in the Notice of initiation.

the initiation of

the apparent

In view of
large number of exporting
producers of the product concerned in the PRC, known
from the request and from the previous investigation, the
the investigation of
use of sampling techniques for
dumping was envisaged in the Notice of initiation. Addi-
tionally, the Commission sent sampling questionnaires to
importers known to the Commission services.

(6) OJ C 36, 15.2.2003, p. 18.

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Official Journal of the European Union

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(7)

(8)

(9)

(10)

the

However, only a limited number of exporting producers
from the PRC made themselves known and provided,
within the prescribed time-limits,
information
requested in the Notice of initiation. Therefore, the use
of sampling techniques was not considered necessary
in the PRC were
insofar
exporting producers
reported
concerned. Additionally, only one importer
imports
PRC.
Therefore,
sampling techniques was not
considered necessary as far as importers were concerned.

the use of

originating

glyphosate

the

of

as

in

The Commission sent questionnaires
to the parties
known to be concerned and received replies from four
exporting
Community producers
producers. One importer reported imports originating
in the PRC and subsequently submitted a reply to a
full questionnaire.

and two Chinese

Producer in the market economy third country:

— Monsanto do Brasil, São Paulo, Brazil.

(11)

The investigation into the likelihood of a continuation or
recurrence of dumping in the review investigations
covered the period from 1 January 2002 to 31
December 2002 (the IP). The examination of trends in
the context of the analysis of the likelihood of a conti-
nuation or recurrence of injury covered the period from
January 1999 to the end of the IP (the analysis period).

A number of exporting producers in the PRC,
four
producers and 13 suppliers located in the Community
as well as an association of distributors and users, made
their views known in writing. All parties who so
requested within the prescribed time limit and showed
that there were particular reasons why they should be
heard were granted the opportunity to be heard.

(12)

The Commission sought and verified all
information it
deemed necessary for the determination of whether there
was a likelihood of a continuation or recurrence of
of
injurious
Community interest. Verification visits were carried out
at the premises of the following companies:

assessment

dumping

and

the

for

4. Market

economy treatment

(MET)

and individual

treatment

Pursuant to Article 2(7)(b) of the basic Regulation, two
Chinese companies, Zhejiang Xinan Industrial Group Ltd
(Xinanchem) and Zhenjiang Jiagnan Chemical Factory
(Zhenjiang),
treatment.
requested MET and individual
However,
it was found that Zhenjiang had no exports
of the product concerned into the Community during the
IP. Therefore,
for MET and individual
treatment of Zhenjiang became irrelevant. Xinanchem
was required to complete a MET claim form detailing
all the relevant information required.

request

the

Exporting producers in the PRC:

— Zhejiang Xinan Industrial Group Ltd, Xinanjiang,

Jiande City, Zhejiang Province, the PRC;

Producers in the Community:

— Cheminova Agro A/S, Lemvig, Denmark, (including
also the related distributor Headland Agrochemicals
Ltd, Great Chesterford, Essex, United Kingdom),

— Herbex Produtos Químicos, SA, Sintra, Portugal,

— Monsanto
Belgium,
Monsanto UK Ltd., Cambridge, United Kingdom),

SA, Brussels
also the

and Antwerp,
related distributor

Europe
(including

also the

— Syngenta UK, Huddersfield, United

related companies:

Kingdom
(including
Stauffer
Chemical BV, Seneffe, Belgium and Syngenta Supply
AG, Basel, Switzerland, and the related distributor
Syngenta Crop Protection, Whittlesford, Cambrid-
geshire, United Kingdom);

(13) Although the majority of the shares of the company were
owned by private persons, due to the wide dispersion of
the non State-owned shares, together with that fact that
the State owned by far the biggest block of shares, the
company was found to be under State control. Moreover,
the board of directors was in fact appointed by the State
shareholders and the majority of the directors of the
board were either State officials or officials of State-
owned enterprises. Therefore,
it was determined that
the company was under a significant State control and
influence.

(14) Moreover, it was established that the government of the
PRC had entrusted the China Chamber of Commerce
Metals, Minerals & Chemicals Importers and Exporters
(CCCMC) with the right of contract
stamping and
verifying export prices
for customs clearance. This
system included the setting of a minimum price for
glyphosate exports and it allowed the CCCMC to veto
exports that did not respect these prices.

(15)

Consequently, after consulting the Advisory Committee,
it was decided not to grant MET to Xinanchem on the
basis that the company did not meet all the criteria set in
Article 2(7)(c) of the basic Regulation.

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(16) As Xinanchem was not granted market economy status,
the company applied for individual treatment,
i.e. the
determination of an individual dumping margin on the
basis of
its individual export prices. The Commission
verified whether this company enjoyed, both in fact
and in law, the necessary degree of independence from
the State for setting its export price.

i.e. as a non-selective herbicide.

which is the only form that can be used as an end-
product,
In view of
importers and formulators were treated as one
this,
group (importers/formulators)
for the purposes of the
investigation.

2. Like product

(17)

In this respect,
it was established that Xinanchem was
subject to significant State control with regard to setting
of its export prices of the product concerned as explained
in recital 14. It was, therefore, concluded that Xinanchem
did not meet the necessary requirements for individual
treatment as set in Article 9(5) of the basic Regulation.

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(18)

The product concerned is glyphosate originating in the
PRC (the product concerned), currently classifiable within
CN codes ex 2931 00 95 (TARIC codes 2931 00 95 81
and 2931 00 95 82) and ex 3808 30 27 (TARIC codes
3808 30 27 11 and 3808 30 27 19). The
product
concerned is the same as in the investigation leading to
the imposition of
the original measures (the original
investigation).

(19) Glyphosate is a non-selective herbicide which can exist in
different grades or forms of concentration of which the
main ones are acid, salt and formulated product. Acid is
the basic form of the chemical resulting from the manu-
facture process and is usually found as a dry powder,
with 95 % glyphosate content, or as wet cake, with 84
% glyphosate content, the difference being due only to
the moisture content remaining. Salt is a soluble form of
glyphosate which is made from acid.
is a liquid,
normally containing 62 % IPA salt (1) content which is
equivalent to a glyphosate content of 43 %. Formulated
glyphosate is generally in a liquid form consisting of a
mixture of glyphosate salt, water and other chemicals,
surfactants and additives which enable the
such as
herbicide to be absorbed into the plants and improve
effectiveness. The typical standard form of formulated
glyphosate contains 360 grams/litre of glyphosate.

It

(21) Glyphosate produced and sold in the Community by the
Community producers requesting the expiry review and
glyphosate produced in the PRC and sold in the
Community by the Chinese exporting producers share
the same basic physical, technical and chemical charac-
teristics as well as the same uses and are therefore
considered to be like products, within the meaning of
Article 1(4) of the basic Regulation. It was also estab-
lished that glyphosate produced and sold domestically in
the market
analogue
country),
same basic physical,
technical and chemical characteristics as well as the
same uses as glyphosate produced in the PRC and
exported to the Community. Therefore,
they were
considered to be like products within the meaning of
Article 1(4) of the basic Regulation.

i.e. Brazil, had the

third country (the

economy

(22)

C. LIKELIHOOD OF CONTINUATION OR RECURRENCE

OF DUMPING

Two Chinese companies cooperated in the investigations.
However, only one of them (Xinanchem) had exports of
the product concerned to the Community during the IP
(hereafter the Chinese exporting producer). Consequently,
the cooperation of the other company (Zhenjiang) was
limited to the expiry review investigation. The total
quantity of glyphosate originating in the PRC imported
during the IP is less than 50 % of the quantity imported
during the investigation period of the original
investi-
gation (12 months
to end August 1995). Since
consumption was increasing, the market share held by
imports of the product concerned originating in the PRC
decreased more significantly over the same period. From
11 % during the investigation period of
the original
investigation,
it decreased to below 3 % at the start of
the analysis period and to less than 2 % in 2001, but
subsequently increased during the IP while still remaining
below 2 %.

(20)

In order to reduce the costs of transportation, importers
normally purchase glyphosate in a concentrated form
(usually acid or wet cake, but also salt) and further
it by adding water
process
and other
(formulate)
to obtain formulated glyphosate,
chemicals in order

(1) Salt of glyphosate acid and Isopropylamine.

1. Analogue country

(23)

Since the PRC is considered to be an economy in tran-
sition, the Commission had to determine in this case the
normal value on the basis of data obtained from
producers
in
in a market economy third country,
accordance with Article 2(7) of the basic Regulation.

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(24)

For this purpose, the Commission suggested Brazil in the
Notice of initiation which was also the analogue country
used in the investigation leading to the imposition of the
measures.

(30)

(25) All

interested parties were given the opportunity to
comment on the choice of analogue country envisaged.

(26)

(27)

(28)

The Chinese exporting producer argued that a country
with a more appropriate level of economic development
to the PRC should be used and that an analogue country
situated in Asia would offer a better point of comparison.
It is to be noted that the same level of economic devel-
opment is, as such, not relevant for the purpose of estab-
lishing the normal value. Even though no substantiated
proposals for an analogue country other than Brazil were
made,
the Commission inquired from Taiwanese and
Malaysian known producers of the product concerned
about their willingness to provide the necessary infor-
in Taiwan and
mation. However,
these producers
Malaysia submitted that both of
these markets were
strongly influenced by low-priced imports of glyphosate
the prices in these
originating in the PRC and that
countries were not
in
Taiwan considered that other countries, such as Brazil,
were more suitable for this purpose. As a result no
further cooperation of these producers was achieved.

representative. One producer

The Chinese exporting producer in the PRC submitted
also that
information concerning Brazil would be
provided by an affiliated related company of a member
of the applicant and that the Commission should rather
use independent and properly verifiable information for
the purpose of establishing normal value. However,
it
was considered that the fact that one company in the
proposed analogue country is a related company of a
member of the applicant did not preclude that the infor-
mation obtained could be reliable and verifiable. Special
attention was paid to the necessity to eliminate any
possible effects of the relationship in determining the
normal value.

Since Brazil was considered a reasonable choice, with
producers willing to cooperate and using a comparable
production process, and particularly taking into account
that Brazil was the analogue country used in the inves-
tigation leading to the imposition of the measures, Brazil
was chosen as the analogue country. The Commission
sought to obtain the necessary information from the two
known producers in the country, i.e. Monsanto do Brasil
(Mobras) and Nortox. The Commission was ultimately
able to obtain information only from Mobras, which is
a company related to a member of the applicant. It was
determined that the domestic sales of this company were
representative in relation to the volume of the product
concerned sold by the Chinese exporting producer to the
Community.

2. Normal value

(29) Normal value was calculated for all forms of glyphosate
i.e. glyphosate acid and

produced and sold in Brazil,
different formulations based on their concentration.

It was established that the product types sold on the
domestic market of Brazil were not comparable to the
product types sold by the said exporting producer to the
Community. Therefore, in accordance with Article 2(3) of
the basic Regulation, normal value was constructed on
the basis of the manufacturing costs plus a reasonable
amount
for selling, general and administrative costs
(SG&A) and for profit. The SG&A costs and profit
were determined on the basis of Mobras' domestic sales
of the like product. In this regard it is noted that Mobras
sourced the major part of its raw materials for glyphosate
production from a related company in Brazil. The profit
level of the related company was adjusted to a lower
level, when determining the cost of acquisition of raw
material used in the calculation of the manufacturing
costs.

(31)

The amounts for SG&A and for profits were based on
actual data pertaining to sales, in the ordinary course of
trade, of glyphosate, by Mobras.

3. Export price

(32) All export sales of the Chinese exporting producer to the
Community were made
independent
customers in the Community and the export price was
established in accordance with Article 2(8) of the basic
Regulation on the basis of the prices paid or payable.

directly

to

(33)

The comparison of the data concerning exports to the
Community provided by the Chinese exporting producer
and the total volume of imports originating in the PRC
as determined in recital 58 below, indicated that the level
of cooperation was low, since these exports represented
less than 26 % of total Community imports from the
PRC during the IP.

4. Comparison

(34)

For the purposes of a fair comparison between the
normal value and the export price, due allowance in
the form of adjustments was made for differences
which were claimed and demonstrated to affect price
comparability in accordance with Article 2(10) of the
basic Regulation. On this basis, adjustments were made
taxes,
where
appropriate with regard to indirect
loading and
discounts,
ancillary costs, packing, credit and commissions. The
adjustments in the export price in respect of
inland
freight
in the exporting country, packing costs and
credit costs were made based on the costs established
in the analogue country.

insurance, handling,

transport,

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(35)

The comparison between normal value and export price
was made on an ex-works basis.

5. Dumping margins

(36) A comparison of the normal value and the export price
of the Chinese exporting producer showed a dumping
margin of 28,7 % during the IP.

(37)

In the absence of individual treatment being granted to
this exporting producer, an overall dumping margin was
calculated for the whole of the PRC.

more than 100 % since the imposition of the definitive
measures. Therefore,
the
exporting producers in the PRC could also divert their
existing exports to other markets to the Community
market in significant quantities at dumped prices.

the measures were lifted,

if

(42)

Information provided by the applicant showed that more
than 80 % of all glyphosate production in the PRC is
exported. In respect of the two cooperating exporting
producers, exports accounted for a major proportion of
it was
their total production of glyphosate. Therefore,
established that most of the glyphosate production in
the PRC was directed to export markets.

(38)

(39)

(40)

(41)

Since, as described in recital 33, the level of cooperation
for the export volumes of non-cooperating
was low,
Chinese exporting producers, the level of dumping was
determined on the basis of the highest margin established
for a representative type of the product concerned, of the
cooperating exporting producer. This approach was
deemed appropriate since no indication was found that
any of
the non-cooperating producers dumped the
product at a lower level than that of the cooperating
exporter. Therefore, a dumping margin of 30,2 % was
attributed to all non-cooperating exporting producers
and the cooperating exporting producer which had no
exports to the Community during the IP.

(43)

Finally, a country-wide average dumping margin was
calculated using as a weighing factor, the cif value of
each group of exporters, i.e. cooperators and non-coop-
erators. The established country-wide dumping margin
was 29,9 %.

(b) Unused production capacities in the PRC

applicant

The two cooperating companies declared that
their
production capacity during the IP was around 34 000
tonnes of glyphosate expressed in 95 % acid equivalents.
Since 1999 these two companies have increased their
production capacity by more than 92 % according to
their questionnaire responses. Information provided by
the
glyphosate
production capacity in the PRC amounted to 79 500
tonnes. Both cooperating companies were operating
close to full capacity levels. However, the information
provided by the applicant
the average
capacity utilisation rate of all producers in the PRC was
around 83 % in 2001 i.e.
leaving a spare capacity of
about 13 500 tonnes.

estimated that

showed that

total

the

lower

The country wide dumping margin established in the
than the
interim review investigation was
dumping margin established in the original investigation
and, furthermore, it was lower than the dumping margin
established in the anti-absorption investigation pursuant
to Article 12 of the basic Regulation. It is to be recalled
that
there has been a considerable reduction in the
normal value of the product concerned since the IP of
the original
it is reasonable to
conclude that
likely that a higher dumping
margin would recur if the measures were amended to
reflect the dumping margin established in the interim
review investigation.

investigation. Therefore,

is not

it

6. Development of imports should measures be repealed

(a) PRC export sales to other countries (volume and prices)

It was found that glyphosate was sold to third countries
at prices even lower than the dumped prices of the sales
to the Community market as derived from the ques-
tionnaire
statistics.
Moreover, as derived from the questionnaire responses
the volumes of exports to third countries increased by

from Eurostat

responses

and

(44)

Based on the above, it was concluded that the exporting
producers in the PRC have available capacity to increase
their exports to the Community market should the
measures be repealed.

(c) Circumvention/absorption practices in the past

(45) As indicated in recital 1, following the imposition of
definitive duties in February 1998, two other investi-
to Article 12 and
gations were conducted pursuant
the basic Regulation. The findings of
Article 13 of
these investigations demonstrated the inability of
the
PRC exporters to compete on the Community market
at non-dumped levels, because in order to be present
on the Community market they had to resort to circum-
vention practices by transhipping the product concerned
to the Community via other countries at significantly
dumped
investigation
pursuant to Article 13) and to absorption practices.

(anti-circumvention

prices

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(d)

Imports under inward processing

(51)

(46) More than 90 % of recent imports originating in the PRC
have been made under inward processing arrangements.
During the analysis period,
imports originating in the
inward processing regimes have
PRC made under
steadily increased, at the expense of duty paid imports,
from around 60 % of the total
in 1999 to more than
90 % in the IP. PRC exports have clearly shifted to the
inward processing regime in recent years.

(e) Conclusion on the likelihood of a continuation of dumping

Since the PRC has unused production capacity and
average export prices to non-EC countries were, during
the investigation period, substantially lower than those
it could be
prevailing on the Community market,
expected that, should the measures be repealed, addi-
tional production, or sales currently exported to non-
EC countries, would
the
be
Community market in significant quantities.

redirected

towards

(52)

(47)

(48)

(49)

(50)

The investigation showed that exports originating in the
it is
PRC are still made at dumped prices. Therefore,
in the absence of any indication to the
reasonable,
that dumping would likely continue in the
contrary,
future. Moreover,
the volume of dumped imports,
which is currently at low levels, was found likely to
increase significantly should measures expire.

7. Undertaking

in the

cooperating

exporting producer

The
PRC,
Xinanchem, expressed its interest in offering an under-
it is recalled that Xinanchem did not
taking. However,
meet the requirements to be granted individual treatment
because there was a price-control system in place which
was entrusted to the CCCMC by the State. Moreover, due
to the low level of cooperation obtained from exporting
producers in the PRC, the Commission was not in a
position to consider further an undertaking proposed
by Xinanchem because of
the high inherent risk of
circumvention of such an undertaking. The cooperating
exporting producer was informed accordingly. Further to
that
the Commission received no actual offer for an
undertaking from Xinanchem.

D. SITUATION ON THE COMMUNITY MARKET

1. General

represented

The four Community producers that co-operated in the
investigation
Community
production of glyphosate during the IP. Therefore, they
constitute the Community industry within the meaning
of Article 4(1) and Article 5(4) of the basic Regulation.

100 %

of

as

distinct

from formulators

For the purposes of this review, and as in the original
investigation, the Community industry is considered as
comprising only actual producers of glyphosate, i.e. those
that manufacture glyphosate from the necessary raw
that only
materials
transform one form of glyphosate into another. One
Chinese exporting producer claimed that
formulators,
i.e. companies that buy glyphosate acid or salt and
process it into formulated glyphosate, should also be
the
considered as Community producers. However,
product concerned by this review is glyphosate in its
various forms and it is clear that a formulator — by
definition — only processes
an existing form of
glyphosate
therefore not
accepted that a formulator is actually a producer of
glyphosate.
between
producers and importers/formulators is consistent with
the approach adopted in the original investigation.

into another

Furthermore,

distinction

form.

this

is

It

Concerning one producer, it was necessary to consider
whether it could be defined as a Community producer
due to the corporate structure of the group of which it
formed part.
It was found that this producer is fully
integrated in a single economic entity, which consists
of a large number of companies and operates as
follows: The group headquarters,
located outside the
Community, purchases the raw materials. A subsidiary
in the Community (the producer in question) manu-
factures glyphosate acid under a toll arrangement with
the group headquarters, which still retains ownership of
the glyphosate. Subsequently, the glyphosate acid is sold
by the group headquarters to a second subsidiary in the
and
Community, where
it
is then
formulated product. The formulated product
sold on to a network of related distributors in the
Community within the group which finally sell
to
independent customers. The investigation has shown
the glyphosate produced by this company is of
that
the manufacturing
that
Community
operations, the technological and capital investment for
the manufacturing operations and the sales operations
take place in the Community. Based on the above, this
producer is a Community producer within the meaning
of Articles 5(4) and 4(1) of the basic Regulation.

is processed into salt

origin

and

it

(53) A Community producer and an association representing
distributors and users claimed that one company that
was considered a Community producer was not,
in
fact, producing glyphosate acid within the Community
but merely importing acid or salt from a third country
and formulating it in the Community. The investigation
has shown that, while the company does import certain
quantities of formulated glyphosate from third countries,
nevertheless, the majority of the products it sells in the
Community are made from glyphosate acid produced by
the company itself in the Community. The company was
therefore considered as a Community producer, and the
claim had to be rejected.

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(54)

The examination of the impact of the dumped imports
on the Community industry included an evaluation of all
economic factors and indices having a bearing on the
state of the industry from 1999 to the IP.

(58)

(55)

(56)

In general, figures concerning volumes of glyphosate are
inclusive of all forms of glyphosate, unless it is stated
otherwise. For comparison purposes, volumes have been
restated on the basis of a 95 % glyphosate acid content.
The figures for sales by the Community industry only
produced
glyphosate
include
the
sales of glyphosate
any
Community,
imported
certain
by
resold
Community producers.

and exclude

subsequently

sales

and

of

in

2. Community consumption

The market for glyphosate within the Community, into
which the Community industry sells, covers both the
demand for formulated product which is ready to be
used as a herbicide, plus the demand by importers/for-
mulators for glyphosate in either salt or acid form for
further processing into formulated product and which
may subsequently be sold either in the Community or
exported. Both of these demands can be supplied either
by the Community industry itself or by imports from
third countries. The Community
consumption has
therefore been assessed at the level of sales to distribu-
tors/users and importers/formulators. This has been
calculated on the basis of the total volume of production
by the Community industry, adjusted in respect of
imports as
changes
reported by Eurostat and supplemented by information
provided by the Community industry concerning certain
volumes which received specific customs treatment, less
the exported volumes
reported by the Community
industry.

in stock levels, plus

the total

(57) On this basis, Community consumption was found to
have increased steadily and by 41 % between 1999 and
2002. This reflects the increasing acceptance and use of
glyphosate as a non-selective herbicide. Detailed data,
expressed in tonnes, is as follows.

Table 1

Consumption

Consumption

1999

2000

2001

2002
(IP)

Tonnes
(95 % acid equivalent)

24 782

29 280

31 562

35 021

Index

100

118

127

141

3. Volume of the imports originating in the PRC and

market share

statistical

the original

the market share held by imports of

The volume of imports of the product concerned was
established on the basis of
information
provided by Eurostat and supplemented by information
provided by the Community industry concerning certain
volumes which received specific customs treatment. In
order to protect the confidentiality of this information,
figures are expressed in indexed form. The total quantity
of glyphosate originating in the PRC imported during the
IP is less than 50 % of the quantity imported during the
investigation (12
investigation period of
months to end August 1995). Since consumption was
increasing,
the
product concerned originating in the PRC decreased
more significantly over the same period. From 11 %
investi-
during the investigation period of the original
gation,
it decreased to below 3 % at the start of the
analysis period and to less than 2 % in 2001, but subse-
quently increased during the IP while still remaining
below 2 %. As explained in recital 46, more than 90 %
of recent imports originating in the PRC have been made
under inward processing arrangements, demonstrating
imported is
that
the
actually
the
that
in the Community.
measures make it difficult to sell
imports originating in the
During the analysis period,
PRC made under
inward processing regimes have
steadily increased, at the expense of duty paid imports,
from around 60 % of the total
in 1999 to more than
90 % in the IP. The market share of PRC exporters has
clearly diminished as a result of the measures in force,
but
they nevertheless continue to maintain a clear
presence on the Community market. The development
of imports originating in the PRC and the market share
of the PRC during the analysis period is shown in the
following table in indexed form, taking 1999 as a the
basis.

the majority of PRC glyphosate

re-exported,

reflecting

fact

Table 2

Imports originating in the PRC

Imports originating in
the PRC

1999

2000

2001

Volumes
(indexed)

Market share
(indexed)

100

100

95

81

76

62

2002
(IP)

100

73

4. Prices of the imports concerned

(a) Evolution of prices

(59) As

imports of

formulated glyphosate originating in
the PRC into the Community have been negligible
and there have been no imports of glyphosate salt
during the IP, the development of prices was establi-
shed by using prices for glyphosate acid only. This

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information is based on Eurostat figures. The prices of
imports of glyphosate acid 95 % originating in the PRC,
expressed in EUR/kg before the application of the anti-
dumping duty, decreased steadily from EUR 3,50 in
1999 to EUR 2,80 in the IP, a drop of 20 % overall.
Detailed data is as follows:

Table 3

PRC prices

PRC prices

1999

2000

2001

2002
(IP)

3,50

3,31

3,04

2,80

EUR per kg before
anti-dumping duty
(at 95 % acid
equivalent)

was based on the information submitted in the course of
the investigation by the cooperating exporting producer.
On the basis of Community frontier prices, inclusive of
customs duties but before anti-dumping duties, during
there was an undercutting margin of 20 to
the IP,
30 % indicating that without the measures, the prices
exposed to
on the Community market would be
downward pressure by the lower prices of
the PRC
glyphosate. Given the level of the existing anti-dumping
duties (48 %) the duty paid price of glyphosate origi-
the
nating in the PRC exceeded the sales price of
Community industry by 10 to 20 %.
should be
noted, however, that an underselling margin in excess
of 80 % was established in respect of sales during the
IP of glyphosate of PRC origin on a duty unpaid basis,
as explained in recitals 119 and 120.

It

Index

100

94

87

80

(c)

Imports originating in other third countries

(b) Price undercutting

(60)

For the reason explained in recital 59, the assessment of
price undercutting was also made by using prices for
glyphosate acid only. As acid imported originating in
the PRC is in 95 % acid form and that sold by the
Community producers on the Community market is in
to enable a correct
wet cake 84 % form,
in order
comparison, prices of wet
glyphosate were
converted to a 95 % acid content basis, which is
possible since essentially the only difference between
the two products is the greater water content of the
wet cake. Additionally, the price of Chinese glyphosate

cake

relate

imports

(61) As mentioned in recital 71 below, one Community
producer imported significant quantities of
formulated
glyphosate from related companies in third countries.
to a high-value non-standard
These
formulated product. Both the import and resale prices
for this product are significantly higher than prices of
the main formulated products produced and sold by
the Community industry in the Community. Therefore,
these imports did not contribute to price depression on
the Community market.

The import figures given below include also glyphosate
exclude
imported
glyphosate imports by a Community producer
from
related companies in third countries.

processing

inward

under

but

(62)

Table 4

Import volume from other third countries and market shares

95 % acid
equivalent

Tonnes

1999

Market
share

Price
EUR/kg

Tonnes

2000

Market
share

Price
EUR/kg

Tonnes

2001

Market
share

2002(IP)

Price
EUR/kg

Tonnes

Market
share

Price
EUR/kg

Malaysia

1 884

7,6 % 2,85

1 622

5,5 % 2,84

1 239

3,9 % 2,57

78

0,2 %

2,83

Indexed

100

100

86

100

66

90

4

99

Taiwan

736

3,0 % 3,87

1 253

4,3 % 3,87

469

1,5 % 3,46

1 354

3,9 %

3,24

Indexed

100

100

170

100

64

90

184

84

Others

1 292

5,2 % 3,94

2 141

7,3 % 3,82

2 212

7,0 % 3,40

1 695

4,8 %

3,19

Indexed

100

100

255

100

174

89

90

84

TOTAL

3 912

15,8 % 3,38

5 016

17,1 % 3,44

3 920

12,4 % 3,13

3 127

8,9 %

3,20

Indexed

100

100

128

102

100

93

80

95

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(63)

To give a meaningful price comparison for glyphosate
imports from third countries, this comparison has been
made on the basis of glyphosate acid, which accounted
for more than 90 % of glyphosate imports during the IP.

(64)

(65)

(66)

apart

from those

Imports of glyphosate by companies not related to the
Community producers have decreased slightly from
3 912 tonnes in 1999 to 3 127 in the IP. The only
significant imports during the IP from countries other
than the PRC,
imports by the
Community producers from related companies outside
the Community, come from Taiwan (see the table
above). Following an anti-circumvention investigation,
Council Regulation (EC) No 163/2002 extended the
duty to imports of
the product concerned consigned
from Malaysia or Taiwan (whether declared as originating
in Malaysia or Taiwan or not), with the exception of
those produced by one named company in each of
those countries. Imports from Malaysia have decreased
substantially following the extension of measures and
during the IP they were not significant.

imports decreased during 2001
In the case of Taiwan,
when the anti-circumvention investigation was under
way but increased again during the IP to a level repre-
senting approximately 4 % of Community consumption.
While the level of imports from Taiwan continues to be
it must be borne in mind that not all
relatively high,
exports from Taiwan are subject to the extended duties
resulting from the anti-circumvention review. It is also to
be noted that during the analysis period the prices of
imports from Taiwan, were 10 to 20 % higher than
imports originating in the PRC, not taking into account
the anti-dumping duties applicable to imports originating
in the PRC, and that Taiwanese prices did not undercut
the Community industry prices during the IP. Imports
from all other countries are made at prices very close
to those of the Community industry.

5. Situation of the Community industry

(a) General

In order to make a meaningful assessment of certain
it was necessary to exclude data in
injury indicators,
respect of
the producer referred to in recital 52 in
those cases where this data may have been influenced
by companies within the group structure but located
outside the Community. Since the profitability of the
European operations of this company are affected by
chain,
the
its
including
the
it was deemed appropriate to exclude the
Community,
data from this company from the analysis of indicators
in sections (f) profitability and (h) cash flow and ability to
raise capital, as well as from the analysis of ‘return on
investment’
Investments and return on
this company resulted
investments. Furthermore, as

its whole
located

in section (g)

achieved by

headquarters

outside

supply

results

two previously

independent
from the merger of
entities, it was not in a position to provide information
for the whole of the analysis period in relation to sales
prices and employment. For that reason,
it was also
necessary to exclude the available information from the
analysis of the trends in sections (e) Sales prices and costs
and (i) Employment, productivity and wages. As this
company only accounted for in the range of 15 % to
25 % of Community production of
the product
concerned, the findings set out below are considered to
be representative.

(b) Production, production capacity and capacity utilisation

Production of glyphosate by the Community industry
increased from 48 334 tonnes in 1999 to a peak of
54 575 tonnes
in 2000 and then decreased to a
quantity of 50 448 tonnes in the IP. This represents an
overall increase of 4 % over the analysis period.

Production capacity increased from around 63 000
tonnes in 1999 to almost 70 000 tonnes in the IP, an
increase of 11 %. The increase during 2000 and 2001 is
due to additional production facilities becoming opera-
in the
tional combined with continued refinements
production process.

Capacity utilisation initially increased from 77 % to 83 %
in 2000, but then decreased through 2001 to a level of
72 % during the IP, an overall decrease of five percentage
points compared with 1999. The economic effect of the
existence of decreased capacity utilisation was examined
and it was found that its impact on profitability was not
significant.

the product

in the light of
The decreasing capacity utilisation,
concerned in the
increasing sales of
is negatively affected by the development
Community,
the Community industry to third
of export sales of
countries. During the analysis period, export sales of
the Community industry steadily decreased from 58 %
of its world-wide sales in 1999 to 38 % of its world-
wide sales in the IP.

in third countries

affected by a decrease

Both the production and capacity utilisation figures for
2001 and 2002 were
in
production by one Community producer due to its
decision to import certain glyphosate products from
related companies
than
producing them in the Community. The products in
question are newly developed forms which require addi-
tional production equipment, currently unavailable in the
Community. The deterioration in these injury indicators
in 2001 and 2002 should be considered in the light of
this development which has been mentioned in recital
61. The detailed data is as follows:

rather

(67)

(68)

(69)

(70)

(71)

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Table 5

Production

Production

1999

2000

2001

2002
(IP)

Production
(tonnes at 95 % acid
equivalent)

48 337

54 575

52 406

50 448

Index

100

113

108

104

63 029

65 720

70 028

69 930

Production
capacity
(tonnes at 95 % acid
equivalent)

to 29 607 tonnes in the IP, an overall increase of 48 %.
Similarly, the Community industry increased its market
share from 80 % in 1999 to 85 % in the IP, having
reached a level of 89 % during 2001. The decrease in
market share from 2001 to 2002 was affected by
imports of glyphosate
from third countries by a
Community producer, as mentioned in recital 71.

Table 7

Sales

Sales

1999

2000

2001

2002
(IP)

Index

Capacity
utilisation

(c) Stocks

100

104

111

111

77 %

83 %

75 %

72 %

Community industry
sales
(tonnes)

19 945

24 323

28 229

29 607

Index

100

122

142

148

Community industry
market share

80 %

83 %

89 %

85 %

(72)

Stocks of glyphosate increased over the analysis period
from 9 149 tonnes in 1999 to 14 554 tonnes in the IP,
an increase of 59 %. The main build up occurred in 2001
and 2002. This reflects the efforts of the Community
producers to maintain high capacity utilisation in order
to cover the fixed costs of their plants, while at the same
time the market was not able to absorb those quantities.
Detailed data is shown below:

(75)

Table 6

Stocks

Stocks

1999

2000

2001

2002
(IP)

Tonnes

Index

9 149

9 902

13 049

14 554

100

108

143

159

(e) Sales prices and costs

a herbicide. Additionally,

Prices were compared at the formulated stage, as this is
the form of glyphosate that is used by the final consumer
as
formulated glyphosate
accounts for the vast majority of glyphosate sales both
in terms of value and of volume. In order to ensure a fair
comparison of prices, and given the existence of a variety
of types of formulated glyphosate on the market, the
prices of which can vary considerably both according
to the concentration of the product and the type of
surfactant used,
the Commission services selected the
most common formulation, a standard formulation
which has 360g of glyphosate content per litre. This
so-called ‘standard 360 formulation’
accounted for
around 40 % by volume of glyphosate sales in the
Community by the Community industry during the
is now outside of
analysis period and, because it
patent,
either
imported from the PRC or made from imported acid
or salt originating in the PRC.

formulation that

typical

the

is

is

(73) A party in the PRC argued that the build up of stocks by
the Community industry could not be attributed to the
effect of imports from the PRC but that it just related to
decreased sales by the Community industry on export
markets. In this regard, it should be noted that compe-
tition from PRC glyphosate, which was imported under
also
inward processing and subsequently exported,
contributed to the decreased sales by the Community
industry on the export market.

(d) Sales volume, market share and growth

(74)

The sales on the Community market of glyphosate
produced by the Community industry increased steadily
during the analysis period from 19 945 tonnes in 1999

(76) Additionally, for this comparison, formulated glyphosate
produced by the Community industry containing special
surfactants designed to make the product less hazardous,
were considered separately. Sales of this non-hazardous
formulation containing also 360g of glyphosate per litre
accounted for around 20 % by volume of glyphosate
sales in the Community by the Community industry
during the analysis period. Glyphosate acid normally
accounted for around 18 % by volume of
the total
glyphosate sales in the Community by the Community
industry during the analysis period,
remainder
consisting of glyphosate salt and other non-standard
formulations containing a different glyphosate content
per litre and/or special surfactants to improve the effec-
tiveness or hazard classification.

the

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L 303/11

(77) Glyphosate acid is the main element

in the cost of
standard
production for glyphosate formulation. For
360 formulation it accounts for around 55 % of
the
total cost of production and for around 45 % in the
case of non-hazardous 360 formulation.

Table 9

Non-hazardous 360 formulation

Non-hazardous 360
formulation

1999

2000

2001

Quantity sold
(Index)

% of EU sales
(Index)

Sales price
(Index)

100

123

125

100

100

100

100

88

90

73

2002
(IP)

106

69

88

78

Cost of production
(Index)

100

79

(80)

The table below shows the combined weighted average
forms of
sales price and cost of production for all
glyphosate,
formulated
i.e. salt, acid and all
products. Sales prices and cost of production seemingly
increased in 2001. The reason for this is a change in the
product mix sold on the Community market,
i.e. the
Community industry sold less of the lower-value acid
and salt products on the Community market.

types of

Table 10

All products

All products

1999

2000

2001

8,92

7,94

8,16

2002
(IP)

7,61

100

8,55

89

91

85

7,58

8,01

7,84

Sales price
(EUR per kg at 95 %
acid equivalent)

Index

Cost of production
(EUR per kg at 95 %
acid equivalent)

(78)

The sales prices of standard 360 formulated glyphosate,
(the
expressed per kilogram at 95 % acid equivalent
equivalent of 2,64 litres of
fell
formulated product),
steadily from EUR 9,23 in 1999 to EUR 7,28 in 2002,
an overall decrease of 21 %. Cost of production also fell
steadily from EUR 10,37 in 1999 to EUR 8,14 in the IP,
a total decrease of 21 %. This product was unprofitable
throughout the analysis period, although the gap between
cost of production and sales price remained relatively
stable over the period.

Table 8

Standard 360 formulation

Standard 360 formu-
lation

Quantity sold
(tonnes at 95 % acid
equivalent)

1999

2000

2001

2002
(IP)

7 632

9 102

10 015

10 322

% of EU sales

43 %

41 %

39 %

Sales price
(EUR per kg at 95 %
acid equivalent)

9,23

8,65

7,55

38 %

7,28

Index

100

94

82

79

Cost of production
(EUR per kg at 95 %
acid equivalent)

10,37

9,31

8,88

8,14

Index

100

90

86

79

Index

100

88

94

92

(79)

formulated product),

formulated glyphosate containing
For non-hazardous
360 g of glyphosate per litre, the sales price, expressed
per kilogram at 95 % acid equivalent (the equivalent of
2,64 litres of
fell steadily from
1999 to 2002 for an overall decrease of 12 %. Cost of
production also fell from 1999 to 2001, but increased
again in the IP for an overall decrease of 22 %. The
increase in cost of production in the IP is due to
reduced capacity utilisation. The profitability of
this
product increased in the course of the analysis period.

(f) Profitability

(81)

The overall profitability of the Community Industry in
respect of glyphosate activities deteriorated from 4,2 % in
1999 to – 2,6 % in the IP. This profitability relates to all
forms of
the
Community industry in the Community. Glyphosate
imported and resold, as mentioned at recital 71, has
not been included in this calculation.

glyphosate produced and sold by

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(82) A party in the PRC argued that the product which was
imported and resold should have been included in the
assessment of overall profitability. In this regard, these
products have been correctly excluded since they do not
contribute to the profitability of the Community industry
relating to production and sales in the Community. The
argument is therefore rejected.

(83) Overall profitability was also negatively affected by the
mix of products sold by the Community industry on the
Community market. The Community industry planned to
move away from the ‘standard’ glyphosate formulation,
which has been selling at a loss under pressure from low
priced imports, mainly from the PRC and Taiwan,
towards more sophisticated, higher value products such
as the non-hazardous formulations. However, during the
IP, sales of these higher value products produced within
the Community decreased due to a weaker demand for
these products, having a negative effect on overall profit-
ability. The profitability figures are given in table 11.

selling product of

(84) Glyphosate is also sold by importers/formulators on the
Community market. These sales, almost exclusively of
standard 360 formulation glyphosate, which is
the
biggest
the Community industry,
compete directly with the sales by the Community
industry of
the same formulation. The glyphosate in
question is sourced either as acid or salt primarily from
Community producers, but is also imported from third
countries. While sales by the Community industry to
supply the demand of this standard formulation have
the Community
not been profitable, nevertheless,
industry needs to continue to supply them as these
sales provide a contribution to cover their fixed costs
through the maintenance of capacity utilisation.

Table 12

Investments

Investments

1999

2000

2001

2002
(IP)

Investments
(EUR '000)

Index

Return on
investment

50 940

7 409

9 035

7 883

100

15

18

15

22 %

157 %

17 % negative

(h) Cash flow and ability to raise capital

(86)

the Community industry deteriorated
Cash flow of
between 1999 and the IP, both in absolute values as
well as expressed as a percentage of
turnover. This
decrease is in line with the deterioration of the overall
profitability during the analysis period.

Table 13

Cash flow

Cash flow

1999

2000

2001

13 217

11 769

4 975

2002
(IP)

– 562

100

89

38 negative

5,0 %

4,4 %

2,1 %

– 0,3 %

Cash flow
(EUR '000)

Index

Cash flow expressed
as
of
percentage
turnover

Table 11

Profitability

Profitability

1999

2000

2001

Profitability
(Community sales)

4,2 %

4,3 %

0,6 %

2002
(IP)

– 2,6 %

(87)

Capital is either raised on the stock exchange or alterna-
tively funded internally within the company. Investments
and, in some cases, spending for R&D have been limited
in recent years reflecting the decreasing profitability of
glyphosate sales. The absence of significant investments
since 2000 is confirmed by the figures given in recital
85.

(g)

Investments and return on investments

(85)

It has

Investment in the glyphosate business decreased sharply
the 1999
after 1999 to between 15 % and 18 % of
figures.
the
investments relating to the capacity increases in 2001
were made in the years up to 1999. No significant
investment was planned or made for the remainder of
the analysis period. Detailed data is shown below:

to be noted that

the bulk of

(i) Employment, productivity and wages

(88)

The Community producer referred to in recital 52 above
was not in a position to present comparable figures for
the whole of the analysis period for the reason explained
in recital 66, therefore making it necessary to exclude the
available information for
to
examine the trend on a consistent basis.

this company in order

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(89)

Employment decreased in the analysis period from 1 017
employees in 1999 to 808 employees in the IP, a
decrease of 20 %. This reflects a decrease in production
in 2001 and 2002, but also reflects the fact that,
in
as measured by output per
general, productivity,
worker, has increased. In 2002 productivity decreased,
mainly due to a reduction in capacity utilisation as
noted in recital 71. The increase in wage costs per
worker is a result of collective bargaining at industry
level.

circumvention of the measures via Malaysia and Taiwan,
as established in the anti-circumvention investigation
mentioned in recital 1, certainly contributed to the
price depression within the Community and on the
industry.
declining profitability of
Should imports from the PRC resume at higher levels,
the impact on the Community industry of the dumping
found in the current investigation would be significant.

the Community

(90) A party in the PRC argued that

the reduction in
employment
resulted from increased efficiency rather
than from injury. However, the reduction in employment
is largely a consequence of reduced production by the
recognised that
Community industry, although it
increased efficiency has also had an effect, as has been
noted at recital 89.

is

(92)

Table 14

Employment

Employment

1999

2000

2001

2002
(IP)

Number of
employees

Index

Wage costs per
employee
(in EUR)

Index

Production per
employee
(tonnes/year)

Production per
employee
(indexed)

1 017

846

791

808

100

83

78

80

57 730

60 040

63 619

64 871

(93)

100

44

104

56

110

58

112

49

100

129

133

112

(j) Magnitude of dumping and recovery from past dumping

Two parties in the PRC argued that the measures were
not effective and should be removed since, during the
period for which they were in place,
the economic
situation of the Community industry did not recover
significantly. In this regard,
it must be noted that the
effectiveness of the measures was reduced by continuing
imports
price pressure linked to decreasing prices of
originating in the PRC.
should be
recalled that absorption and circumvention practices
occurred following the imposition of the measures, as
mentioned in recitals 1 and 45, which also limited the
effectiveness of the measures. In view of these factors, the
argument
should be removed is,
therefore, not accepted.

the measures

In addition,

that

it

6. Conclusion on the situation of the Community industry

share. This must be viewed,

Following the imposition of the anti-dumping measures
against imports originating in the PRC, the economic
situation of
the Community industry improved in
terms of productivity, production, production capacity,
in
sales and market
addition to the existence of
in the
the increasing consumption of glyphosate
context of
within the Community. However,
sales prices have
steadily decreased resulting in a steady deterioration in
profitability and culminating in losses in the IP. This has
adversely affected cash flow, while stock levels have
increased and employment has decreased.
In addition,
there has been no substantial new investment since
2000.

the measures,

(91) As

the

concerns

situation of

the
impact on the
Community industry of the magnitude of the dumping
margin found in the IP (29,9 %), it should be noted that,
while the margin is less than that found in the original
investigation (38,2 %), it still remains at a high level. The
situation of the Community industry initially improved
to a certain extent after the imposition of the original
measures, but it did not completely recover. It should be
noted that dumping increased further to 62 %, as estab-
lished in the anti-absorption investigation mentioned in
recital 1. This increased dumping and the subsequent

(94) A party in the PRC argued that the weak situation of the
Community industry was due to its excess production
capacity and reduced export sales. This argument
is
rejected in the light of the considerations mentioned in
recitals 69 and 73. It is therefore considered that the
economic
industry
continues to be weak.

the Community

situation

of

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Official Journal of the European Union

30.9.2004

(95)

E. LIKELIHOOD OF CONTINUATION AND/OR RECUR-

RENCE OF INJURY

Since the imposition of measures, the PRC has continued
to sell glyphosate to the Community at dumped prices.
While the quantity entering the Community market has
decreased (inter alia, as a result of the measures), PRC
exporters continue to maintain a clear presence on the
market. Moreover, via their sales mostly under inward
processing, they nevertheless continue to exert a certain
pressure on prices within the Community. They currently
have spare production capacity, amounting to approxi-
mately 40 % of Community consumption, and,
in
addition,
if measures were removed, they would be in
a position to redirect existing exports away from lower
the
priced markets
in
Community market
as
mentioned in recitals 41 and 47 above. This would
enable them to supply increased quantities
to the
in
Community market at prices
significant price undercutting and price depression in
the Community if the measures in force would expire.
Prices of imports of the product concerned from the PRC
would also undercut the export prices of other third
countries, e.g.
in the case of Taiwan by somewhere
between 10 to 20 %.

towards
quantities,

that would result

significant

third
in

countries,

of importers/formulators who seek to obtain products to
supply both Community and export demands at
the
most competitive prices available. Therefore, the prices
of imports under inward processing contributed to the
price pressure which led to the deterioration of the prof-
itability of the Community industry on the Community
market, and to its continued weak economic situation.
The argument is, therefore, not accepted.

(98) As shown in recital 93,

the Community industry is
currently in a weak situation,
in particular as regards
its profitability which has continually declined, since
the imposition of the measures under consideration, to
a situation where the industry was making losses during
the IP and is even experiencing a negative cash flow. On
the basis of all
if the
Community industry was exposed to increased volumes
of imports originating in the PRC at dumped prices, this
would result in a deterioration of its already weakened
financial situation and a loss in its market share. On this
it is concluded that, should the measures expire,
basis,
injury to the
this would lead to a continuation of
Community industry.

it is therefore likely that

this,

(96) A party in the PRC argued that the low quantity of
imports of glyphosate from the PRC should not affect
prices on the Community market and that the decrease
in Community prices was due to reductions in costs of
production by the Community industry. This argument is
rejected as it was found that glyphosate is a commodity
product and therefore the presence of relatively small
quantities of glyphosate on the Community market at
low prices affects market prices. This is the case in
particular
formulated product which
accounts for around 40 % of Community industry sales
on that market and against which imports from the PRC
compete directly. Despite the efforts of the Community
industry to reduce its costs, its profitability in respect of
remained negative
the
the
throughout
decreasing prices.

the analysis period as a result of

standard formulated product

standard

for

(99)

(100)

F. COMMUNITY INTEREST

1. General considerations

is

The Commission examined whether the maintenance of
the anti-dumping measures on glyphosate would be in
the interest of the Community. It has been found that
there
injurious
dumping. The investigation also considered whether or
not there are any overriding interests against maintaining
the measures and also took account of the past effects of
duties on all the various interests involved.

continuation of

likelihood of

a

in the original

the interest of

It should be recalled that,
investigation,
the adoption of measures was not considered to be
the Community. Since this is
against
also an expiry review investigation, the impact of the
existing measures,
in particular on users, consumers
and importers/formulators was also examined.

(97) Another party in the PRC considered that imports under
inward processing should not have been taken into
account in assessing injury as these are not sold on the
it should be noted
Community market. In this regard,
that imports of glyphosate salt and acid under inward
processing compete directly with the same products from
the Community industry for the demand by importers/-
is,
formulators
therefore, correct to take the quantities of such imports
into account
injury. Moreover,
although imports under inward processing are not them-
selves sold within the Community, the effect of the prices
of these imports is felt in the market through the action

in the assessment of

to supply their

export markets.

It

2. Interest of the Community industry

(101) Glyphosate originating in the PRC is still offered at cif
values below the current sales prices of the Community
producers. Therefore, the expiry of measures would lead
to glyphosate originating in the PRC gaining
either
market
to the
share on the Community market
detriment of the Community producers, or alternatively
the Community industry would have to lower their
already declining sales prices even further in order to
maintain market share and capacity utilisation. In both
scenarios the Community industry would suffer losses
due to an expiry of measures.

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Official Journal of the European Union

L 303/15

(102) The Community producers claimed that the measures
had been either absorbed by the PRC or circumvented
for most of the analysis period, thereby resulting in them
having a limited remedial effect. The absorption and
circumvention via Malaysia and Taiwan have been
confirmed and addressed by the review investigations
mentioned in recital 1.

it

than
mulators deal with a range of products other
glyphosate,
is considered that, even if measures
would have the effect of limiting a decrease in glyphosate
acid prices, the impact of the measures on the overall
business of these companies would be limited.

(103) Several suppliers of raw materials and services came
forward
reduced
that
Community production if measures were to expire, and
therefore a reduced demand for their raw materials and
services.

expect

stated

they

and

a

(107)

(104)

the

from the

situation of

In view of the above, it is considered that, in the absence
of anti-dumping measures on imports of the product
the
PRC,
concerned
Community industry would worsen through increased
imports at dumped prices from the PRC leading to
increased financial losses. While imports from the PRC
have dropped during the period analysed,
it must be
a
glyphosate
stressed that
commodity. In these circumstances, even a low level of
imports at dumped prices can have a detrimental impact
on the Community industry. The Community industry
has increased production, sales volumes and market
share over the period analysed but at the expense of
profits. The essential viability of the industry would be
threatened in the absence of measures to eliminate the
injurious dumping.

considered as

can be

3. Interest of unrelated importers/formulators

(105) Since the major part of glyphosate imports originating in
the PRC into the Community is in the form of acid or
salt and is resold in a formulated form, the formulating
therefore concerned by this proceeding.
industry is
that, while
Certain of
these
currently
of
only
glyphosate from the PRC,
they would recommence
imports from the PRC in the absence of measures.

importing minimal

importers

quantities

indicated

(106) One

importer/formulator

fully cooperated with the
It presented a submission in which it
Commission.
stated its position against measures because
any
increase in the price of the main input would reduce
its profit margin on formulated glyphosate. A number
of
importing
glyphosate acid originating in the PRC as a result of
the existing measures stated that they would recommence
sourcing the product
from the PRC should measures
expire. As it was found that most of the importers/for-

formulators who are

currently not

at

the

that

expense of

the financial benefit
since

Importers/formulators expect
lifting the measures
would lead to lower prices for their glyphosate on the
Community market, allowing them to expand their
the Community
share
market
producers. However,
from this
would be
importers/formulators
limited,
would be forced to pass on the bulk of their decrease
in cost to their customers due to competition from other
formulators also importing glyphosate originating in the
PRC. Moreover,
the importers/formulators should not
obtain advantage through dumping since this creates an
imbalance vis-à-vis the other competitors, namely the
Community industry.

the

(108) For the abovementioned reasons, it is considered that the
benefits afforded to the Community industry resulting
from maintaining the measures would outweigh any
marginal negative impact that may result for the impor-
ters/formulators concerned.

4. Interests of distributors and consumers

(109) The Commission received a submission by an association
representing distributors and users of agrochemicals in
the EU. This association put forward a number of alle-
gations concerning the behaviour of
the Community
producers on the Community market to the detriment
of independent distributors of agrochemicals.

(110) This association and an importer/formulator claimed
that the Community market is heavily protected against
through regulatory barriers, namely Coun-
imports
cil Directive 91/414/EC of 15 July 1991 concerning
the placing of plant protection products on the mar-
ket (1), therefore making it unnecessary for measures to
remain in place. This claim was repeated by the asso-
ciation following disclosure of the findings. It has to be
relate to trade
noted that

this Directive does not

(1) OJ L 230, 19.8.1991, p. 1. Directive as

last amended by
Commission Directive 2004/71/EC (OJ L 127, 29.4.2004, p. 104).

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Official Journal of the European Union

30.9.2004

defence, but rather to environmental safety issues. It was
nevertheless argued that obtaining the necessary infor-
mation for registration of glyphosate is both costly and
time consuming and acts as a deterrent for importers/-
formulators to import glyphosate from third countries.
However, in practice this does not appear to be a severe
limitation since a number of importers/formulators have
succeeded in obtaining registration under Directive
91/414/EC. Furthermore, the cooperating importer/for-
mulator stated that they would import glyphosate origi-
nating in the PRC should measures be lifted. Therefore, it
is considered that Directive 91/414/EC does not close the
Community market to imports of glyphosate from the
PRC.

of

the

production

the Community
Furthermore,
industry is significantly larger than consumption in the
Community and, therefore, it is important economically
for all Community manufacturers to export glyphosate to
third countries in order to achieve high capacity utili-
sation in order to fully absorb their fixed costs. In this
insufficient evidence to
context,
there is at present
conclude that a cartel exists,
involving the deliberate
supplied to the Community
limitation of quantities
the
market
question of
is a
matter which should rather be addressed in the context
of an anti-trust
investigation. However, no anti-trust
procedure has been initiated, to date, by the Commission
on this matter.

to the detriment of consumers. Finally,
the existence or not of any cartel

(111) The association further claimed that

low prices of
‘generic’
standard formulated products produced by
formulators based on acid or salt manufactured by a
certain Community producer are compensated by high
prices of ‘branded’ equivalent products sold by the same
producer. It was claimed that these low priced ‘generic’
products would act as a deterrent toward the entry of
including imports of glyphosate
other manufactures,
originating in the PRC,
to the Community market.
While it was confirmed that formulators purchase acid
and/or salt from this Community producer at low prices,
it could not be said that the Community producer was in
a position to achieve high prices on its formulated
75, Community
products. As
producers,
concerned, were
selling their standard formulated products (which are
branded products) at a loss during the analysis period,
which makes the claim that they would be in a position
‘brand’ products
to obtain high prices on their
implausible.

recital
including the producer

stated

in

(112) This association also claimed that

regard,

In this

the Community market.

two Community
producers operate a cartel
in the Community because
one of them appears to limit its market share in the
Community while they could supply a much larger
it
share of
should be noted that evidence presented in support of
the claim was not conclusive, since factors other than the
existence of a cartel could explain the alleged limitation
of the market share by the Community producer. First of
all, it has to be pointed out that the market share of not
only the producer
in question but also of other
producers did not vary substantially over the analysis
period. Secondly, sales on export markets could be
the
made at higher prices, and hence the fact
company did not
sell more in the Community as
opposed to outside of it could possibly be explained by
other factors such as, for example, the company's own
efforts to maximise returns on export markets which
were more profitable than the Community market.

that

(113) On the other hand, there was no indication concerning
possible negative effects of the continuation of the anti-
dumping measures as regards the glyphosate distributors.

(114) As regards the consumers of the product, these are essen-
tially farmers. A reduction in the price of glyphosate
would have a minimal effect on their profitability since
this is only a relatively minor item in the overall cost of
crop growing. It was established that the expiry of the
measures would lead to an improvement in the profit
margin of farmers which would be of the order of 0,1 %.

(115) For the abovementioned reasons, it is considered that any
benefits afforded to the Community industry resulting
from maintaining the measures would outweigh any
marginal negative impact that may result for the distri-
butors and consumers concerned.

5. Conclusion on Community interest

(116) Should the existing measures expire, it is expected that
the Community industry would suffer significant losses
due to price depression on the Community market,
which would either lead to a loss of market share
against increased imports originating in the PRC or a
further deterioration of
their sales prices should they
attempt to maintain their market share. Importers/formu-
lators could benefit from an increasing market share due
to cheaper supply of glyphosate originating in the PRC,
but, compared to the losses incurred by the Community
industry, the economic effect of this for importers/for-
mulators would be minor in view of the need to pass on
price reductions to their clients. There was no indication
concerning possible negative effects of the continuation
of the anti-dumping measures as regards the glyphosate
distributors. For users, although these might benefit
somewhat from lower prices if measures were removed,
this would not have a significant effect on their profit
margin or, consequently, on their activity.

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Official Journal of the European Union

L 303/17

(117) After weighing the interests of

the various parties
involved, the Commission concludes that there are no
compelling reasons of Community interest against the
continuation of measures.

Country

Company

People's Republic of
China

All exporting
producers

Rate of AD
duty

29,9 %

G. PROPOSED DUTIES

(118) The product type used as a reference to determine the
duty rate was glyphosate acid because it is the common
base of all forms of glyphosate exported from the PRC
and produced in the Community. It was found that acid
the manufacturing costs of the
accounts for 55 % of
equivalent
formulated
360
of
quantity
the acid form represented more
product. Moreover,
than 90 % of
the volume imported from the PRC
during the investigation period. It is therefore considered
that a duty established on the basis of data concerning
glyphosate acid would be representative of all different
forms of glyphosate imported from the PRC.

standard

(123) The anti-dumping duty in force in respect of glyphosate
was extended by Regulation (EC) No 163/2002 to cover,
in addition,
imports of glyphosate consigned from
Malaysia and Taiwan, whether declared as originating in
Malaysia or Taiwan or not. As a consequence of the fact
that the anti-dumping duty, as calculated in this review,
replaces the duty in force, the anti-dumping duty to be
applied to imports of the product concerned, as set out
should be extended to imports of
in recital 122,
glyphosate
and Taiwan,
whether declared as originating in Malaysia or Taiwan
or not. The
two exporting producers who were
exempted from the measures as extended by Regulation
(EC) No 163/2002 should also be exempted from the
measures as imposed by this Regulation.

from Malaysia

consigned

(119) For

the purposes of calculating the price increase
necessary in order to remove the injurious effects of
dumping, it was considered appropriate to compare the
prices of the dumped imports with the production costs
of glyphosate acid of the Community industry increased
by an amount sufficient to achieve a reasonable level of
profit. The Commission took the view that a profit
margin of 5 % represented a reasonable profit since
glyphosate acid is a commodity,
theoretically sold in
bulk to intermediate customers who bear the extra cost
of formulation before selling it in the market to end
users, as already considered in the original investigation.

(124)

(125)

In accordance with Article 20 of the basic anti-dumping
Regulation, all parties concerned were informed of the
essential facts and considerations on the basis of which it
was intended to propose to reduce the level the existing
measures. They were also granted a period within which
to make representations subsequent to that disclosure.
The comments received have been taken into consid-
eration.

review investigations,

It follows from the above that, based on the findings of
the
anti-dumping duties
imposed by Regulation (EC) No 368/98, should be
lowered to 29,9 % expressed as a percentage of the net
free-at-Community frontier price before duty,

the

(120) On this basis, the weighted average of the export prices
for this product type for the IP, on a cif Community
frontier level, was compared with the weighted average
total cost of production of the Community producers,
increased to give by a profit margin of 5 %. This
comparison showed an underselling margin of 80 %.

(121) Since the injury margin is higher than the dumping
margin found, the anti-dumping duties should be based
on the dumping margin in accordance with the
provisions of Article 7(2) of the basic Regulation.

(122)

In view of the findings above, it is considered appropriate
that the anti-dumping duties imposed by the original
measures should be set at the level mentioned below:

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on
1.
imports of glyphosate falling within CN codes ex 2931 00 95
(TARIC code 2931 00 95 82) and ex 3808 30 27 (TARIC code
3808 30 27 19) originating in the People's Republic of China.

2.
The definitive anti-dumping duty mentioned in paragraph
1 is hereby extended to imports of glyphosate consigned from
Malaysia (whether declared as originating in Malaysia or not)
(TARIC codes 2931 00 95 81 and 3808 30 27 11) with the
exception of
those produced by Crop Protection (M) Sdn.
Bhd., Lot 746, Jalan Haji Sirat 4 1/2 Miles, off Jalan Kapar,
42100 Klang, Selangor Darul Ehsan, Malaysia (TARIC additional
code A309).

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Official Journal of the European Union

The definitive anti-dumping duty mentioned in paragraph
3.
1 is hereby extended to imports of glyphosate consigned from
Taiwan (whether declared as originating in Taiwan or not)
(TARIC codes 2931 00 95 81 and 3808 30 27 11) with the
exception of those produced by Sinon Corporation, No 23,
Sec. 1, Mei Chuan W. Rd, Taichung, Taiwan (TARIC additional
code A310).

The rate of duty applicable to the net free-at-Community-
4.
frontier price, before duty, of the products described in para-
graphs 1 to 3, shall be 29,9 %.

Unless otherwise

5.
concerning customs duties shall apply.

specified,

the provisions

Article 2

The anti-dumping duties shall be imposed for a period of five
years from the date of entry into force of this Regulation.

Article 3

This Regulation shall enter into force on the day following its
publication in the Official Journal of the European Union.

30.9.2004

in force

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 24 September 2004.

For the Council
The President

L. J. BRINKHORST