Jakarta (The Jakarta Post/ANN) - Indonesian paper manufacturers have been freed from a dumping allegation made last year in Thailand, which will allow them to get back their grounds in the market, after the investigation by the country's authority found no indications of dumping.
Indonesian Trade Ministry's trade defence director, Ernawati, said yesterday that five Indonesian producers of coated paper and paper boards, all under major paper maker Sinar Mas Group, would not be charged with an anti-dumping duty, a move that would boost Thai buyers' confidence to purchase the products from Indonesia again.
As stipulated by the rules of the World Trade Organisation (WTO), anti-dumping duties can be collected by a country against imports of goods from other countries to counter impacts of dumping, with which exporters sells products in overseas markets at prices lower than their production costs and/or lower than the actual prices in their home market.
"As the dumping allegation on Indonesian coated paper and paper board has been removed, the government expects exports of the two products can rebound to the level before 2011," Ernawati said.
Although Thailand had yet to determine a margin dumping or impose an anti-dumping duty, exports of the two items had dropped following the allegation; buyers in Thailand stopped making new orders from Indonesian manufacturers on fears that the duty could be effective soon, Ernawati added.
During the years before the allegations emerged, Indonesian exports of coated and paperboard to Thailand had shown significant growth. Exports, which settled at 47,113 tonnes in 2008, rose by 15.07 per cent to 62,187 tonnes in 2009, and by 10.03 per cent to 68,426 tonnes in 2010, according to statistics at the Trade Ministry. However, exports fell by 32.56 per cent to 46,145 tonnes in 2011 when the allegation was lodged.
The Thailand Department of Foreign Trade commenced a probe into the case on July 8, last year following a petition from one of its major producers, Thai Paper Company Limited. In addition to Indonesia, the probe was also carried out into imports from China, Japan, Korea and Taiwan.
In its demurrer submitted to its counterpart, the Indonesian government argued the domestic production of coated paper and paper board in Thailand from 2006 to 2009 could not cope with surging consumption of the items, causing imports to soar, Ernawati said.
Indonesia, currently the ninth-largest pulp and paper producer in the world, has faced recurrent dumping allegations overseas as local industry can manufacture the products efficiently, partly attributed to its tropical climate that helps shorten lifecycle of trees.
Generating around 8 million tonnes of pulp and paper annually, Indonesia can make paper at the lowest production cost of roughly US$200 per tonne, according to an estimate by the Indonesian Pulp and Paper Association (APKI).
In 2010, Indonesian producers of paper, including coated paper and paperboard, also faced a similar accusation in Pakistan, but late last year, the investigation by Pakistani National Tariff Commission was halted following a ruling issued by Lahore High Court.
Last month, Japan accused 11 Indonesian companies under two local giants - Sinar Mas Group and PT Riau Andalan Pulp and Paper - of dumping photocopy paper at a margin ranging from 7.55 per cent to 15.78 per cent.
The Trade Ministry is preparing its disclaimer to this allegation and will submit it immediately, according to Ernawati.