Rubber growers oppose duty-free import

Written by M Sarita Varma | Kottayam | Updated: Jul 14 2010, 03:39am hrs
In the ongoing tussle between rubber producers and tyre makers, it is now the turn of rubber growers to retaliate against the tyre industrys demand of banning rubber futures.

As natural rubber prices crossed Rs 182 per kilo last week, the Automative Tyre Manufacturers Association (ATMA) has called for duty-free natural rubber imports.

Reacting to this, Siby Monipilly, general secretary, Indian Rubber Growers Association (IRGA), told FE, that, most of the 1,52,000 tonne natural rubber imports made this year, were without any customs duty, freely drawing on export incentives. There is no reason why the tyre industries, wallowing in profits, should be allowed zero-duty rubber imports.

The association has approached Prime Ministers Office (PMO) seeking that the two-hectare land holding farmer, who constitutes the majority of the countrys rubber cultivation, be allowed to make the most out of the bullish phase in the rubber market.

A unique feature of the rubber market is that the farm gate price of rubber is 98% of the market price.

The lowest rung of farming community would be hurt the most, if the tyre manufacturers demand for ban of rubber futures is heeded, Monipally said.

IRGA has also proposed 20% tariff to block the flood of used tyre imports from China. Besides the high prices, the consumer-industries had been complaining about the non-availability of rubber.

The Association of Rubber Producing Countries (ANRPC) in its latest bulletin had raised apprehensions about a possible speculation bubble in Kottayam market.

ATMA had even questioned the buffer stock data, prepared by state-run Rubber Board. Traders said poor stocks due to rains in the main rubber plantation areas of Kerala, the recent price rally was also fueled by stock holding by farmers in the hope of better prices. Natural rubber prices in India is currently almost Rs 20 per kilo more than that in Tokyo and Singapore bourses.