Lanka scare for copper firms

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By PALLAB BHATTACHARYA in Calcutta
  • Published 1.07.04
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Calcutta, July 1: Primary copper producers are in danger of being swept away by a swelling tide of Sri Lankan imports, which have already cost them 20 per cent in lost sales.

Hindustan Copper chairman Rana Som says a loophole in the Indo-Sri Lankan foreign trade pact is being used by companies there to swamp India with cheap fare.

“Under the agreement, there is no duty on copper if Sri Lankan firms purchase copper from India and export it back with a 35 per cent value-addition. This makes it 23-24 per cent cheaper than the local output,” he added.

The surge in imports has even wiped away gains from hardening prices on the London Metal Exchange (LME). Copper imports have risen phenomenally since the treaty came into effect in 2002. Trade figures show that 893 tonnes came in 2000 and 1492 tonnes in 2001; this shot up to 45,891 tonnes in 2002 and 66,480 tonnes in 2003.

Industry sources say the Sri Lankan exporters are not adding value to the extent of 35 per cent on shipments to India. “There is no refinery in Sri Lanka. Only 6 per cent value-addition is possible in cathodes and 12 per cent in wires. The exporters put a thin insulation on the metal and export it in the form of wires. This helps them dodge revenue officials,” they said.