The import of natural rubber import has increased 42 per cent on a year-on-year (y-o-y) basis from 20,300 tonnes in February 2014 to 28,806 tonnes last month. The cumulative import for the April-February period of FY15 crossed 380,000 tonnes, signalling annual import to cross 400,000 tonnes by March-end.
The total import of the commodity in the first 11 months of the current financial year was 388,683 tonnes, against 335,349 tonnes in the year-ago period, the latest figures from the Rubber Board show.
Although there is strong pressure to enhance the import duty, rubber will pour into the country as the foreign market continues to be quite attractive.
While Union commerce minister Nirmala Sitharaman has said the Centre might increase the duty by five per cent to 25 per cent, increasing the duty is unlikely to curb imports because importing will still be cheaper thanks to the price difference.
For example, the global market price of block rubber (SMR-20), which is mostly imported to India, is Rs 87 a kg. Its landed cost after paying duty is Rs 110 a kg – which is still lower than the local price of Rs 135 a kg. Even if the duty is raised to 25 per cent, the landed cost will only be Rs 113-115 a kg.
Such a measure could only have a ‘psychological impact’ for a short period, said a leading rubber trader. Moreover, the price is set to fall in overseas markets, especially in Bangkok.
Meanwhile, production has also come down – from 57,800 tonnes in February 2014 to 50,000 tonnes last month, a y-o-y drop of 13.5 per cent.
While the monthly consumption increased 4 per cent at 82,500 tones. Total production in April -February period was 620,000 tones as against 726,300 tones, recording a fall of 14.6 per cent. Consumption increased 4 per cent to 928,865 tones as against 894,120 tones, leaving a shortfall of 308,865 tones in local production. This time annual production is likely to be below 700,000 tones.