KOCHI, JULY 23:
The tyre industry is looking at import of rubber on account of the squeeze in domestic availability and rise in prices.
The Automotive Tyre Manufacturers Association (ATMA) pointed out that the domestic rubber prices are ruling 26 per cent more than international prices and even at these levels, the required quantity and grade of natural rubber is not available.
According to the association, the imports contracted now will be arriving only in August or September and that might trigger an unwarranted backlash from rubber producing interests.
In a communication sent to Union Commerce Minister, Chairman of ATMA Anant Goenka, pointed out that tyre companies have no other option but to import natural rubber in the present circumstances.
This disclosure, in advance, about imports is to ward off any allegations (as in the past) that rubber imports by tyre companies are meant to depress the domestic rubber market, he said.
“We trust the Government would appreciate the compulsion of rubber consumers for import as it is warranted by the current situation of serious shortfall between domestic rubber availability and demand”, he said.
Meanwhile, the Rubber Board has called for a meeting of stakeholders at Kottayam on July 24 to “assess the gravity of the situation”.
In view of extremely limited availability of rubber and its spiralling prices, tyre companies are finding it difficult to maintain production schedules, ATMA said.
The tyre Industry accounts for nearly 2/3rd (65 per cent) of total rubber consumption in India. While domestic production/availability falling short of consumption during lean production season (Feb-Sept) is an expected trend, the prevailing situation of scarcity in the domestic market is unprecedented, Goenka added.
In July, the domestic prices have gone up from Rs 181 to Rs 192, a sharp increase of Rs 11 in a short span of 19 days.
On the other hand the international prices have come down from Rs 164 to Rs 153 in the same period.
ATMA, therefore, requested for maintaining a strategic reserve of an essential industrial raw-material such as rubber.
They pointed out that Chinese Government maintains a reserve of rubber to meet the uncertainties in rubber availability and ensure that tyre manufacturing operations remain unhindered.
ATMA has also reiterated that the Government may allow import of NR on a Tariff Rate Quota (TRQ) basis to ease the domestic availability situation.
Such a dispensation was granted in January 2011, when domestic availability position warranted imports and 40,000 tonnes was allowed at a concessional rate of customs duty.
Source: Business Line
