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UPDATE 1-EU states back biodiesel duties on Argentina, Indonesia

Tuesday, 22 Oct 2013 | 11:01 AM ET

* Provisional duties already in place

* Final duties to be in place from end-November

* Argentina planning to challenge decision at WTO

BRUSSELS, Oct 22 (Reuters) - European Union member states agreed to impose punitive duties on imports of biodiesel from Argentina and Indonesia, which are accused of selling it into the bloc at unfairly low prices, according to diplomats.

A majority of the EU members on Tuesday backed the European Commission's view that producers in the two countries were dumping - selling at below fair market or cost price.

The European Commission has proposed duties of between 217 and 246 euros ($300-340) per tonne on biodiesel imports from Argentina and of between 122 to 179 euros a tonne on imports from Indonesia, figures seen by Reuters showed.

Imports are already subject to provisional tariffs, imposed in May. The definitive duties, which are slightly higher, should be in place by the end of November after further procedural steps.

Argentina is the world's biggest biodiesel exporter, and the two countries represent 90 percent of EU biodiesel imports. Their share of the EU market rose to 22 percent in 2011 from 9 percent in 2009.

Biodiesel is mostly made from rapeseed oil in Europe. Palm oil is favoured in Asia and soybean oil in the Americas.

The companies set to be hit by the duties on exports from Argentina include agri-businesses Bunge Ltd and Louis Dreyfus Commodities, which face duties of 217 and 239 euros per tonne, respectively.

Argentina is preparing to take the European Union to the World Trade Organisation to challenge the punitive duties, according to people familiar with the matter.

Argentina has already launched a WTO challenge against EU rules for importing biodiesel, and the EU went to the Geneva-based trade body last December to claim that Argentine import restrictions are illegal.