The Forest Products Association of Canada (FPAC) is deeply disappointed with the decision by China to impose anti-dumping duties on imports of dissolving pulp from Canada.
The Chinese Ministry of Commerce has issued a preliminary determination about dumping featuring dissolving pulp from Canada, United States and Brazil. The decision means duties of 13% will be imposed against Canadian companies Fortress, the AV group and Tembec, as well as 50% duties on any new exports of the material.
“This is an unacceptable trade reaction by China,” says the President and CEO of FPAC, David Lindsay. “It appears China wants to protect its own producers and is unfairly targeting its competition, including mills here in Canada.”
Canadian exports of dissolving pulp to China had increased twenty-fold in the last ten years and last year reached $330 million. Dissolving pulp is a product used to manufacture viscose, a substitute for cotton. Prices for dissolving pulp had soared because of a shortage of cotton. As a result, China built up its own capacity which added to the supply of the material and a dampening of prices. A study by economist Michael Stone shows that the downward trend in the market price for dissolving pulp has not been driven by dumping from Canada. He says the imposed duties will not just hurt Canadian producers, but will also negatively impact China’s viscose fibre producers who rely on imports of dissolving pulp.
“Under our ambitious Vision2020, industry wants to generate an additional $20 billion dollars in new products and new markets by the end of the decade,” says Lindsay. “Growing exports of newer products such as dissolving pulp will help us reach our goals and support jobs in rural communities in Canada. Industry will be exploring its options and working with government to see how to resolve this dispute with China.”