Corn growers and formulators of 2,4-D urged the International Trade Commission Thursday to deny a request from Corteva Agriscience for antidumping duties on low-priced Chinese and Indian imports, claiming the company has been using its position as the sole U.S. producer of 2,4-D acid to gain market share for its Enlist growing system.
At a preliminary conference on the petition, ITC staff heard from a panel of Corteva officials as well as Harold Wolle, president of the National Corn Growers Association, and representatives from formulators Drexel Chemical, PBI-Gordon Companies and Nufarm Americas. Atul Ltd., an Indian manufacturer of 2,4-D acid, also was represented.
“The scenario under consideration has the potential to limit imports of an important product, raise its price, and create a supply shortage, all while raising the cost of production in an already tight market,” Wolle said.
He added that while NCGA is grateful that companies like Corteva “have invested in new technologies, including seed traits and herbicides, that allow us to continue producing more effectively and efficiently every year,” farmers also cannot rely on one supplier “for nearly all of our 2,4-D needs. That will undoubtedly lead to shortages and delays in an industry that must have timely delivery.”
The downstream users of the acid form of 2,4-D produced by Corteva didn’t restrain themselves in criticizing Corteva’s petition, which covers the years 2021-2023. “Sitting here today I cannot understand why Corteva, by far the 800-pound gorilla in the room, brought this misguided petition,” said Stanley Bernard, vice president of Drexel Chemical Co.
“Corteva has always internally consumed the vast majority of its 2,4-D acid to produce, and sell, formulated herbicide products in the commercial market,” Bernard said, leading to insufficient supply of domestically produced 2,4-D that is “commercially available to satisfy the production needs of synthesizers and formulators like Drexel.”
Deanna Tanner Okun of the Polsinelli Law Firm, speaking for all the parties opposing Corteva’s petition, said Corteva “has steadily reoriented the small volume of commercial sales that it previously made of 2,4-D acid, salts and esters toward internal consumption and production” of Enlist herbicides used on corn, soybeans and cotton.
Corteva, however, argued that an increasing volume of underpriced imports from China and India were making it impossible to compete in the domestic market.
“We have witnessed an increase in imports coupled to a significant decrease in price of those same imports,” said Ricardo Garcia de Alba, Corteva’s row crop herbicide and nitrogen management global portfolio leader. “At these pricing levels, we cannot participate in a reasonable manner against these imports. This situation negatively impacts our sales and causes our capacity to be underutilized. These impacts are derived from the Chinese and Indian imports that are priced below fair market value.”
The formulators, however, said price was never brought up in discussions with Corteva. “Corteva’s decision [not to sell] had nothing to do with price,” said Brendan Deck, regional general manager North America for Nufarm Americas.
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“At no point did Corteva say, if you could pay a higher price we would supply the same quantities,” Deck said. “Rather, it was very clear from our discussions with Corteva that Corteva did not want to supply 2,4-D at Nufarm at any price. Rather, Corteva wanted to keep all available supply of 2,4-D D for themselves so they could increase their own production of Enlist herbicides.”
But Dan Cannistra of Crowell and Moring, representing Corteva, pointed in his closing statement to the commission to China’s subsidization of manufacturing.
“When you are producing herbicides in China, not only are you not paying for the raw material -- during the period of investigation, you are getting a credit to take the raw material being used to manufacture 2,4-D in China.”
He urged the commission to look at the cost of raw materials from China and measure it against Corteva’s costs, “and decide for yourself. Would you make that sale to that customer? Would you keep increasing volume?”
Said de Alba, “Chinese suppliers are gaining access to inputs required in the 2,4-D manufacturing process at very low prices, and in some cases for free. For example, there are reports that chlorine, a major input of 2,4-D, is being sold at no cost or even as a credit in the country. This sometimes-negative costs of raw materials, among other things, appear to allow Chinese producers to price their 2,4-D below cost.”
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