KOCHI, JULY 30
With rubber production hitting a six-year-low of 1.26 lakh tonnes in the first quarter of the current fiscal year, and consumption at its highest level, at 3.02 lakh tonnes, the Automotive Tyre Manufacturers Association (ATMA) has reiterated its demand for rubber imports on a tariff rate quota (TRQ) basis, with a ‘nil’ rate of duty.
This is important since expensive imports are striking at the root of cost saving measures being adopted by the industry to stay competitive internationally, said Rajiv Budhraja, Director-General, ATMA.
The production-consumption gap has widened to 58 per cent of consumption in Q1 from 46 per cent in the year-ago period, making the raw material scenario all the more worrisome.
Quoting the Rubber Board’s latest figures, he said NR production contracted by 12 per cent while its consumption went up by 14 per cent, leading to a widening of the gap. The production-consumption gap stood at 1.76 lakh tonnes in the first three months of the ongoing fiscal against 1.21 lakh tonnes in the corresponding period in FY18.
For the second consecutive month in June, rubber consumption breached the one-lakh-tonne mark. Production, on the other hand, has remained below 45,000 tonnes in each of the first three months.
Domestic natural rubber production could meet only 42 per cent of domestic demand in Q1. Such scarcity and inadequate availability of domestic rubber are pushing the tyre industry to a precarious position, he said.
According to ATMA, natural rubber, being the principal raw material, accounting for over 40 per cent by weight, is critical for the industry’s growth and competitiveness. However, a consistent decline in domestic availability and its erratic supply are hurting the production process at tyre companies at a time when a large capacity is going on-stream.
The rubber imports are imperative to meet the huge demand supply gap. However rubber supplies are being squeezed in view of a restrictive policy environment.