MUMBAI: India, the world’s fourth largest rubber producer, could increase import duties on natural rubber by 70 per cent as early as Wednesday in order to support falling local prices, two industry sources and one government official told Reuters.
The government wants to fix import duties at Rs 34 per kg, or 20 per cent, whichever is lower, said an official with the state-run Rubber Board, who declined to be named. The existing duty is Rs 20 per kg, or 20 per cent, whichever is lower.
Domestic rubber prices have fallen nearly 20 per cent in the last five months on sluggish demand and a 19 per cent surge in cheap imports. India imports natural rubber from Malaysia, Thailand and Indonesia.
“The commerce ministry has assured members of parliament from Kerala about raising the duty. Probably today the government will issue a notification,” said a senior official with a leading tyre company, who declined to be named.
The southern state of Kerala accounts for nearly 90 per cent of India’s natural rubber production.
On Tuesday, the spot price of the most-traded RSS-4 rubber (ribbed, smoked sheet) in the Kottayam market in India was Rs 15,650 per 100 kg, while Malaysian SMR 20, which Indian tyre makers prefer to import, stood at Rs 15,818.
That would put a 20 per cent import duty at Rs 31.64 per kg on the Malaysian SMR 20 imports.
Indian spot prices will be updated around 0630 GMT. Indian natural rubber imports in the first 10 months of the financial year that started on April 1, 2012 were 19 per cent higher year-on-year at 197,113 tonnes.
Thai RSS3 rubber changed hands at $2.97 to $3 per kg for March-May, its lowest since November, while Indonesia’s SIR20 was sold at a two-month low of 130.25 to 131.25 cents/lb for March-April, after Tokyo futures plunged from a 10-month high, dealers said on Wednesday.
(Reporting by Rajendra Jadhav; Additional reporting by Lewa Pardomuan in Singapore; Editing by Jo Winterbottom and Miral Fahmy)
Source: India Times
