Date:10/02/2007 URL: http://www.thehindubusinessline.com/2007/02/10/stories/2007021001591200.htm

Back Rubber imports may touch new high

M.R. Subramani

Tyre manufacturers find domestic prices `unreasonable'

Advertisement

Chennai Feb. 9 Imports of natural rubber are likely to be at a record 82,000 tonnes this fiscal, topping the 68,718 tonnes brought into the country during 2004-05.

According to a status paper on natural rubber, the user industry has contracted 41,300 tonnes for import during January-March, while 40,700 tonnes have been imported during April-December.

Most of the imports have come in during the last couple of months after the user industry, mainly tyre manufacturers, found the domestic prices "unreasonable".

According to the Automotive Tyre Manufacturers Association, the tyre companies have contracted another 27,500 tonnes of rubber for imports during April-June.

The price for ribbed smoked sheet (RSS) 4 grade rubber in the domestic market was at Rs 99 a kg on Friday. Its equivalent RSS 3 in the Bangkok market moved up marginally to Rs 107.39.

Rubber imports are mainly made from Indonesia, where the prices are ruling lower than either in Bangkok or Kuala Lumpur.

These imports are made under advance licence scheme, which allows shipments into the country duty-free against export of rubber goods.

Last year, rubber imports totalled 45,285 tonnes.

Though the Rubber Board has estimated a carryover stock of 78,000 tonnes, the user industry is of the view that it would be much higher. This is in view of imports being more than initially estimated by the board.

Tyre manufacturers say the prices should not be ruling at the current high levels as it did not reflect the fundamentals.

While growers are reported to be holding on to their produce, hoping prices will increase from March onwards, the trade has alleged that some vested interests are pushing the prices higher.

"Generally, the October-February period is peak tapping period for rubber and prices should have softened. It has not happened. Both, the growers move to hold back their produce and vested interests have been responsible for this," industry sources said.

However, growers sources say that tapping in Kerala, where over 90 per cent of the country's rubber is grown, was hit by untimely rains during November-December.

Also, wintering has cut into tapping, they say.