GPCA Warns India against Harm of Protectionist Measures on MEG Imports from the GCC

GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)
GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)
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GPCA Warns India against Harm of Protectionist Measures on MEG Imports from the GCC

GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)
GPCA Secretary General Abdulwahab Al-Sadoun. (Asharq Al-Awsat)

India’s recent adoption of trade protectionist measures on mono ethylene glycol (MEG) imports from Kuwait and Saudi Arabia is damaging to its domestic market, the Gulf Petrochemicals and Chemicals Association (GPCA) has warned.

The comments come after India’s Directorate General of Trade Remedies (DGTR) initiated a new anti-dumping investigation into MEG imports from Kuwait, Saudi Arabia, and the United States on June 28, 2021. The investigation – described by GPCA as “unjustified” and in breach of the rules laid by the World Trade Organization – was prompted by an application from two of India’s heavyweight chemical manufacturers.

The news alarmingly comes only a few months after India terminated another anti-dumping investigation concerning imports of MEG originating in or exported from Saudi Arabia (on April 6, 2020), Kuwait, Oman, Singapore, and the United Arab Emirates (on November 20, 2020), after the application filed by one of the two companies was withdrawn following extensive diplomatic and political engagement.

GPCA has called for the immediate termination of the investigation in line with India’s obligations under the WTO Agreements, of which the country is a member.

The association further noted that since the establishment of the WTO in 1995, India has initiated 23 anti-dumping investigations and imposed seven anti-dumping measures against Saudi Arabia and Kuwait. This figure is more than four times the number of investigations initiated, and measures imposed by any other WTO member.

According to a report by India’s Ministry of Chemicals and Fertilizers, India is net short of MEG with current demand of around 2.5 million metric tons (MT).

As this shortfall is expected to continue, GPCA warned India will need to import more MEG to satisfy domestic demand and ensure that prices are sustainable.

The continuous pursual of trade protectionist measures against countries in the Gulf Cooperation Council (GCC), which represent India’s largest chemicals import partner, could not only prove damaging to its domestic market, but also jeopardize exports, thereby creating a bottleneck.

“The new anti-dumping application is utterly unjustified as it is not based on valid legal and factual grounds. It also lacks evidence of MEG imports being dumped from Saudi Arabia and Kuwait,” said GPCA Secretary General Abdulwahab Al-Sadoun.

“The price at which MEG feedstock is imported from the two GCC states is based on market considerations and is in fact not different for MEG that is sold domestically or exported,” he added.

“Furthermore, there was no spike in MEG export volume from the two countries to India during the period of investigation (January 1, 2020 –December 31, 2020). Rather, there was a decline in comparison to the previous year.”

“To state that India’s MEG industry is suffering a material injury would be simply untrue. I can certify with confidence that from the research that GPCA has conducted and the facts on the ground, MEG imports from Kuwait and Saudi Arabia cannot have negatively impacted India’s domestic industry’s performance.”



Gold Rebounds from Two-week Low; US Jobs Data in Focus

FILE PHOTO: Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth//File Photo
FILE PHOTO: Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth//File Photo
TT
20

Gold Rebounds from Two-week Low; US Jobs Data in Focus

FILE PHOTO: Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth//File Photo
FILE PHOTO: Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. REUTERS/Angelika Warmuth//File Photo

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Spot gold rose 0.4% to $3,254.51 an ounce, as of 0610 GMT.

Gold hit its lowest level since mid-April in the previous session and has lost nearly 2% so far this week, the steepest weekly fall since late February.

US gold futures rose 1.3% to $3,263, Reuters reported.

"There have been softening stance (on tariffs) and situation has improved a bit, but still there are a lot of uncertainties so gold will still be preferred by investors," said ANZ Commodity Strategist Soni Kumari, adding that every price correction in gold is seen as a buying opportunity.

"If prices continue to decline and approach the $3,000 level, it could attract a lot of investment demand."

Beijing is "evaluating" an offer from Washington to hold talks over US President Donald Trump's 145% tariffs, China's Commerce Ministry said, although it warned US not to engage in "extortion and coercion."

Bullion, a safeguard against political and financial turmoil, last soared to a record high of $3,500.05 on April 22.

The market now awaits the US non-farm payrolls report due at 1230 GMT for more cues on the Federal Reserve's policy path.

Non-farm payrolls likely increased by 130,000 jobs in April after rising by 228,000 in March, a Reuters survey showed.

Chinese markets are closed for the Labor Day holiday from May 1-5 and will resume trade on Tuesday, May 6.

Gold started trading in premium in India this week for the first time in five months as demand revived due to a key festival and as prices corrected sharply from last week's record high.

Spot silver rose 0.5% to $32.57 an ounce, platinum firmed 1.1% to $968.76 and palladium gained 1.1% to $950.79.