KOCHI, INDIA (Commodity Online): A day after the rubber farmers threatened to boycott the local tyre makers, the south Indian state Kerala is planning a 5% purchase tax waiver on Natural Rubber. This move is expected to deter the tyre companies from reducing importing Rubber from international markets.
The Indian Rubber Growers Association (IRGA) the other day urged the tyre manufacturers to buy rubber from domestic market. The association threatened to boycott the tyre makers if they continue buy cheap rubber from international markets.
The tyre industry has been importing natural rubber at will putting rubber planters into distress. The low international prices prompted them to opt for bulk imports which proved to be a highly profitable move for the tyre industry in India.
All eyes are now on the meeting between Kerala Chief Minister Oommen Chandy and tyre makers scheduled to take place on December 18. Farmers expect Chandy to put the 5% waiver scheme before the major players like MRF Tyres and Apollo Tyres.
Rubber production is down by over 30% at 64,000 tonne in November, year-on-year, when the consumption has risen 12% to 85,000 tonne. Production fell over 30% for the second consecutive month. In August and September, the output was lesser by 25%.
Rubber prices have fallen by 24% in the last 12 months to 118 rupees per kilogram. The drop in prices has prompted farmers to abandon tapping and switch to other commodities.
On Monday’s trade, RSS 4 improved to Rs.114.50 (113.50) a kg, according to traders. The grade closed firm at Rs 114 (113.50) and Rs 111 (110.50) respectively, according to Rubber Board and dealers.
– Commodity Online
