Most of our customers may find our selling prices for olivine sand was greatly increased from October 2006. We would like to clarify all the reasons as follows:
1. Our government cancelled the tax refund for many products including O/S under H.S.Code 2530909090. By this policy, we lost 5%;
2. Once the product is cancelled its tax refund, all exporters have to pay added value tax of 13-17%. For O/S, this part is 13%. That is to say, we have to pay 13% on the basis of the gap between our FOB price and ex works price. Usually this part includes our domestic transportation cost, port charge and our profit;
3. The ocean freight is going up day by day. The low value products like O/S is of course very sensible;
4. Our currency RMB is increased in value continuously, this makes the US dollar price going higher.
Besides these aspects, there are other disadvantageous causes too for price raise, like maker's strong request for higher selling prices and growing domestic transportation cost. But as an experienced export of O/S for over 10 years, we have our power to keep these costs to original levels.
So, if our customers think O/S from China is still more competitive than other origins, we should be the best choice for you the same as before. We are very self-confident for it.
