Rubber board to take call on import clamour

Written by M Sarita Varma | Thiruvananthapuram | Updated: Jul 23 2013, 19:39pm hrs
Even as tyre industry raised its pitch for permission to import more natural rubber (NR), pleading scarcity and high price, the commerce ministry is on a wait-and-watch mode. The Rubber Board of India has called for an urgent meeting at its headquarters in Kottayam to take a call on the crisis.

"The board has received representations from ATMA (Automotive Tyre Manufacturers' Association) and a few auto-tyre manufacturing companies, raising concerns about the availability of NR, besides pointing to the commodity's shortage in the context of excessive rains in Kerala from May-end," said Sheela Thomas, chairman, Rubber Board.

What has provoked ATMA is that domestic NR price is 26% more than international prices and even at these prices, sufficient quantity in the right grades are not available.

In the current month, the domestic NR price has gone up from Rs 181 (on July 1) to Rs 192 (on July 19) per kg, a sharp increase of Rs 11 per kg in a short span of 19 days . On the other hand, the international NR price has come down from Rs 164 to Rs 153 in the same period. This has led to a difference of more than Rs 40 per kg in domestic and international prices.

NR is a critical raw-material for tyre industry. The tyre industry accounts for nearly 2/3rd (65%) of total NR consumption in India.

The industry fears that even if imports are contracted now, they will be arriving only in August or September and that might trigger an unwarranted backlash from NR-producing interests.

In the present circumstances, tyre companies have no option but to import NR. These imports, contracted now will be arriving in the coming weeks / months. This disclosure, in advance, about NR imports is to ward off any allegations (as in the past) that NR imports by tyre companies are meant to depress the domestic rubber market, said Anant Goenka, chairman, ATMA, in a letter to Anand Sharma, minister of commerce and industry.