Rubber-based industry associations said the Rubber Boarddata for the first three quarters of the current financial year (April-December, 2013) only supports the industry’s view that the increase in import of natural rubber played no role in the drop in domestic prices.
According to the view of the associations, the recent price drop was more in line with softness being witnessed in the commodity internationally.
Natural rubber growers, on the other hand, blamed imports as the reason behind the serious fall in prices. Based on their strong agitations, the central government had increased the import duty on rubber in December 2013.
According to the newly released Rubber Board data, in April-December period of 2013-14, natural rubber imports have increased by 91,135 tonne, to a total of 264,576 tonne. This was against the 173,441 tonne brought in during the same period of 2012-13. On the other hand, the decline in domestic natural rubber production in the same period is 70,200 tonne, leaving a net excess of only 21,843 tonne.
“The release of data by Rubber Board only justifies the industry view that the drop in domestic natural rubber prices has nothing to do with increase in imports. Over a total production of 627,000 tonne in the Apr-Dec period, the excess availability of just about 210,000 tonne is too insignificant to dent prices. And certainly not justifiable to warrant increase in import duty,” said Niraj Thakkar, President All India Rubber Industries Association (AIRIA).
Rajiv Budhraja, Director General of Automotive Tyre Manufacturers Association (ATMA) said that a view had been formed that there had been a steep surge in natural rubber imports , which led the government to increase import duty by 50 per cent. Now, the data released by Rubber Board has shown a drastic cut in domestic production too. This fact was not considered in the high-pitched debate on imports. As a result, the industry will continue to suffer from inverted duty structure which has recently got worsened, he said.
Industry reiterates that the natural rubber production drop has been even steeper than what Rubber Board has stated.
“For a long time, in the current financial year, the domestic availability of natural rubber has been a matter of concern. If a deeper study of drop in production is made, the production figure will be even lower than what Rubber Board has stated and the increase in import volumes will be seen only as compensating the drop in production,” Thakkar added.
Business Standard
