On October 27, 2023, the Indonesian Trade Security Committee (Komite Pengamanan Perdagangan Indonesia – KPPI) issued Notice No. 05/KPPI/PENG/10/2023, initiating an investigation into the application of safeguard measures for cotton yarn products from Vietnam.
The Indonesian Textile Association (API) filed the request on behalf of Vietnamese cotton yarn manufacturers urging the KPPI to initiate safeguard measures against cotton yarn products from Vietnam.
The investigation follows Government Regulation No. 34 of 2011 (PP 34/2011) related to anti-dumping measures, compensation measures, and trade remedy under the Decision of the Minister of Trade of Indonesia No. 85 of 2003 (Kepmenperindag 85/2003) concerning the investigation request for protecting the domestic industry from the consequences of increased importation.
The products under investigation include cotton yarn classified under HS codes 5204.11.10, 5204.19.00, 5204.20.00, 5205.11.00, 5205.12.00, 5205.21.00, 5205.22.00, 5205.24.00, 5205.26.00, 5205.32.00, 5205.41.00, 5205.42.00, 5205.43.00, 5205.47.00, 5205.48.00, 5206.11.00, 5206.12.00, 5206.14.00, 5206.21.00, 5206.23.00, 5206.24.00, 5206.25.00, 5206.31.00, 5206.32.00, 5206.33.00, 5206.42.00, and 5206.45.00.
During the period 2019-2022, the applicant’s production decreased by 6.53%. In 2019, the production was 100 index points, dropping to 85.98 index points or 14.02% in 2020. Furthermore, in 2021, the production increased by 5.59%, but in 2022, it decreased by 78.41 index points or 13.63% compared to the previous year. Experts attribute this decrease to reduced domestic demand due to an influx of imported products saturating the domestic market.
In terms of domestic revenue, there was a 5.36% decline from 2019 to 2022. In 2019, domestic sales were 100 index points, decreasing to 85.44 index points or 14.56% in 2020. While domestic sales increased by 16.13% in 2021, they dropped to 79.19 index points or 20.19% in 2022 compared to the previous year. The cause was identified as an overflow of imported products dominating the domestic market.
In 2019, productivity was at 100 index points, increasing to 107.85 index points or 7.85% in 2020. Furthermore, in 2021, productivity increased to 110.95 index points or 2.87%. However, in 2022, productivity slightly decreased to 109.02 index points. During the period 2019-2022, productivity increased by 2.91% due to a significant decrease in the labor force.
According to the information in the investigation request, the unforeseeable increase in the importation of cotton yarn from Vietnam was due to substantial investments and expansions in the Vietnamese yarn industry since 2019.
Additional investments in Vietnam led to the installation of 250,000 more yarn spindles in 2021 compared to 2020, with a capacity of 2,600,000 tons. This capacity further increased in 2022 with an additional 100,000 yarn spindles compared to 2021, reaching a capacity of 2,700,000 tons.
Related parties can review detailed information about the investigation in the initiation notice. Relevant parties with rights and interests can register as interested parties by submitting written proposals before November 11, 2023, which is 15 days from the issuance of the initiation notice.
All submissions/requests from Vietnamese stakeholders must be sent both in writing and electronically, clearly stating the name, address, email, phone number, and fax number of the concerned party to the KPPI.
To safeguard their interests, Vietnamese businesses involved in the investigation are advised to contact a reputable legal firm specializing in anti-dumping and trade defense in Vietnam and internationally to receive timely assistance.
The initiation notice can be downloaded here.