Natural rubber prices in the country may remain high in the short term due to mismatch in supply and demand. The ongoing volatility in prices is likely to slow down the growth prospects of the industry, M F Vohra president, the All India Rubber Industries Association (AIRIA) said.
Natural rubber prices are currently ruling over Rs 90 per kg.
?While natural rubber consumption outstripping production, the losses in output over the last few months may lead to a supply gap of one lakh tonne, resulting in further spurt in prices,? he said at the press conference. Considering the heavy shortage of natural rubber, the industry has sought for duty free import of one lakh tonne of natural rubber through a designated agency for distribution for domestic production as 49,800 tonne imported under DEEC license is meant for export production and has no relevance to domestic demand, he said.
To overcome the situation, the industry needs to depend on imports but import duty of 20% on natural rubber and 70% on rubber latex further make things difficult for the industry, Vohra said. AIRIA noted that the government has fixed duty on raw materials lower than the duty on finished products. The reverse, however, has been happening in case of imports of natural rubber and rubber latex. Where the duties on finished rubber products have been brought down to 10%, natural rubber and latex duties remained unaltered at 20% and 70%, respectively.