In a submission to the commerce secretary the association pointed out that as the market price of natural rubber had risen above the bench-mark price there was no justification for continuation of the import ban.

According to D Ravindran, director, ATMA, there was no indication of a reversal in prices in the coming months as availability of rubber would continue to go down till the end of the lean production season in August. With continuous rain affecting the tapping of natural rubber, availability would further decline, he added.

Price of natural rubber which had dipped significantly since late last year started picking up in May. Prices shot above the average of Rs 28.80 per kg average of April to close at Rs 35.50 on May 31. Natural rubber prices settled at Rs 35 per kg on the first day ofJune.

An expected increase in demand by tyre manufacturers would further help in strengthening natural rubber prices, the association pointed out. There had been a slight growth in tyre production in 1998-99 as production increased by 1 per cent over the previous year in which production had declined. Ravindran said that with the economy looking up and the envisaged growth in the vehicle sector, tyre production was expected to go up further during the current year thereby increasing the demand of natural rubber.

Justifying its demand for lifting of import ban, the association submitted to the government that as export of natural rubber had been allowed it was not appropriate to ban natural rubber import under Advance License Scheme.Ravindran said that according to newspaper reports large quantities of sheet rubber and latex was likely to be exported from the country soon.

The fact that the rubber board had stepped in to give guidance for export would further give a boost to exports. Ravindran said thatwhen exports were likely to increase there was absolutely no reason why imports should not be permitted.

According to the rubber board estimates, the stock of natural rubber in the country at the end of May'99 was 1,75,000 tonne. However, Ravindran said that the availability of RSS-4 grade of rubber used by tyre companies was available in the market only in small quantities.

This implied that growers and dealers were hoarding this grade to starve the market and further boost prices, he said.

Ravindran said that things had worsened for the tyre industry because out of the total stock of 11,000 tonnes with the State Trading Corporation (STC), only 2,000 tonnes of natural rubber was appropriate for the rubber industry. Further, as STC had stopped purchasing rubber from domestic market, tyre companies would subsequently neither be able to import nor be able to procure STC rubber, he added.

In the last three years, the tyre industry had been going through severe recession.

Ravindran said that if priceof natural rubber continued to increase, several tyre units would go sick. "There is a need for immediate lifting of ban on import of natural rubber under Advance License Scheme".