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Statement aimed at paving the way for more imports, say growers
Natural rubber growers have disputed the tyre industry’s claims of a rubber shortage, saying that this was meant to “pave the way for further imports of the raw material”.
The industry’s procurement of rubber below market rates has forced small and marginal farmers to hold on to their stock; this emerging situation has made the industry come out with allegations of shortage, which is not at all true, N Radhakrishnan, past president, Cochin Rubber Merchants Association, told BusinessLine.
According to him, the industry always quoted a price ₹1-3 per kg lower than the published rates of the Rubber Board for domestic rubber. For instance, the RSS IV grade fetches a price of ₹129/kg while the tyre makers procure it at ₹128. Similarly, for RSS V grade, the Rubber Board rates are ₹126/kg, whereas the industry quotes at ₹123.
“How can small and marginal rubber growers survive the industry’s tactics when the sector is passing through a critical phase due to uneconomical prices?” he asked. Through this move, the tyre industry is creating an impression of rubber shortage in the domestic market, he added.
At present, natural rubber imports are costly, with a 25 per cent import duty compared to the domestically produced crop. The majority of the growers felt that the industry could help the crisis-ridden domestic sector by purchasing raw material at the rates fixed by the Rubber Board.
Rubber growers have objected to the concerns raised by the Automotive Tyre Manufacturers’ Association (ATMA) over the decline in production, which has led to a widening gap between demand and supply.
On the industry’s demand to raise production, Radhakrishnan said availability is still there in select areas where production started in December-January after the floods. But it was low, in the range of around 75,000 tonnes. However, the situation will change with the start of rains by mid April, which would push up production, he said.
It is true that the majority of planters have discontinued rubber tapping due to summer; but small farmers, who carry out self-tapping, are still continuing for want of money, he added.
This being the lean period, production will be low because of the low moisture content in the soil, official sources in the sector said. Normally this is the time when growers give tapping a break due to drought-like conditions; Production will go up once summer showers set in, they added.
