China's Ministry of Commerce said Thursday it had launched a probe into claims that foreign imports of a raw chemical used in making pesticides and medicines were being dumped on the domestic market.
The ministry on its website said the investigation into the dumping of benzofuranol was initiated at the request of Hunan Haili Chemical Industry Co Ltd and supported by Jiangsu Shennong Chemical Co Ltd.
The two companies - the only two domestic producers of the benzofuranol - claim imports of the raw material from Japan, the European Union and America were forcing prices down.
"We have invested two million yuan to expand benzofuranol production capacity, but we were forced to stop the second phase of the production line because of fierce competition from imports," said an official surnamed Qiu at Shennong Chemical. China currently imports around 1,500 to 1,800 tons of benzofuranol annually, whereas the total output at Shennong Chemical for 2003 was as low as 200 tons, Qiu said.
In 2000, when domestic manufacturers were just beginning production of benzofuranol, the imported material was priced at 105,000 yuan (12,681 dollars) per ton, but Chinese producers now had to sell as low as 71,000-72,000 yuan per ton, Qiu said.
The dumping probe is due to be completed by August 12, 2005, but could be extended under special circumstances, the ministry said. The ministry said it would then issue an initial ruling and levy anti-dumping duties if necessary.