Stung by exodus of buyers, NR growers seek 6-month halt to zero-duty imports

Written by M Sarita Varma | Thiruvananthapuram | Updated: Oct 9 2013, 07:50am hrs
Stung by the industrys collective week-long market abstinence, natural rubber growers have rushed to the ministry of commerce, seeking raising of the import duty barrierto R34 per kilo. They are also urging a clampdown on all duty-free imports (Duty Exception Entitlement Certificate or DEEC ) of natural rubber for the next six months.

On Tuesday, a frantic Indian Rubber Growers Association (IRGA) submitted a memorandum pointing out that the Centre had been lax in taking any action on the commerce ministrys recommendations, made two months ago.

Tyre manufacturers have created confusion in the trade, by withdrawing from the market for a whole week. They had abstained from rubber trading, causing the country-wide rubber dealers too to follow suit, said advocate Siby J Monipally, general secretary of IRGA, in a memorandum to the ministries of commerce and industry.

This was in violation of the resolution passed by the Rubber Board. Following the Boards resolution, the ministry of commerce had recommended to the Centre to change the import duty to 20% or R34, whichever was lower , This was as early as two months ago. But there was yet to be any action on this.

In 1999, when the imports through duty-free channel increased, the Centre temporarily suspended the duty free channel, by a notification date 20.02.1999. IRGA has been seeking a similar suspension of duty-free import of rubber for six months.

The rubber growers described the consuming industrys deliberate abstinence from the market as unwarranted and prejudicial to the smooth functioning of the countrys rubber supply chain. In 2009-10, when the prices had touched R242 per kilo, on the request of the consuming industry, the import duty was brought down to R20 per kilo for a period of one year and the growers had agreed to this.

Now, the price has fallen to R166, Monipally told FE, attributing the price fall to imports beyond the domestic requirements and intension to manipulate the prices.

In 2013-14, NR imports stood at 2.87 lakh MT. Of this, 50% was imported through the free DEEC channel. Till September 30, imports have touched1.8 lakh MT. By the trend, the imports are expected to grow to 3 lakh MT. At the same time, the countrys demand to supply gap is only 70,000 tonnes.