Pakistan reduces anti-dumping duty on China-made PFY, what’s the impact?

On January 26th, 2022, the Pakistan National Customs Commission announced that, at the request of the Pakistan Court of Appeal, the anti-dumping investigation of polyester filament yarn originating from or imported from China and Malaysia would be reopened, the original final result should be revised, and the anti-dumping duty on the products involved should be adjusted to 2.78-6.82% for China and 3.16% for Malaysia. The measure is valid until August 25, 2022. The dumping investigation period of this case is from October 1, 2014 to September 30, 2015, and the injury investigation period is from October 1, 2012 to September 30, 2015. This case involves products under Pakistan tax No. 5402.3300, 5402.4700 and 5402.6200, excluding colored polyester filament yarns.

The anti-dumping investigation initiated by Pakistan against China's PFY could be traced back to February 2, 2016, and the final anti-dumping ruling was made on August 26, 2017, officially levying an anti-dumping duty of 3.25-11.35%. Comparing the anti-dumping duty rate before and after the adjustment, it could be found that the adjusted anti-dumping duty rate has declined obviously, and the comparison of the anti-dumping duty rate before and after the revision was shown below:

Exports of PFY to Pakistan grew year by year in recent years due to rapidly growing demand for textiles in Pakistan. Pakistan has ranked the 5th place for long and it mainly imported FDY (Hs code 54024700) and DTY (Hs code 54023310) from China, with some textured yarn (Hs code 54023390), which were all under anti-dumping.

As one of the most important export destinations of China's PFY, Pakistan's reduction of anti-dumping duty rate is undoubtedly a great boon. In 2021, China's PFY exports to Pakistan reached a record high of 257kt, accounting for nearly 9% of exports, most of which need to be subject to anti-dumping duties. With the adjustment of anti-dumping duty rates at the beginning of the year, it means that most PFY exported to Pakistan before August 25, 2022 can enjoy the dividend of reduced anti-dumping duties, which to a certain extent increases the export competitiveness of China-made PFY.

2022 is the fifth year of Pakistan's imposition of anti-dumping duties, and it is also the last year of the validity of this round of anti-dumping. Although the reduction of anti-dumping duties at the beginning of the year has sent a positive signal, judging from the fierce price competition in the Pakistani market over the years, it is difficult to avoid anti-dumping, so most market participants still think that Pakistan has little chance of canceling anti-dumping duty on China-made PFY.