Tyre manufacturers are all out to import a whopping 1.3 lakh tonne of natural rubber in the current year, dismissing Rubber Board?s contention that there are enough stocks for all. The consumer industry pointed question – Why are the stocks not flowing to the market?

Last year the tyre industry had imported only 85,000 tonne. Going by the latest import budget plans of tyre industry, the natural rubber imports are likely to grow by more than 50%. There are two big flaws in the Board?s argument of higher domestic stocks, according to Automative Tyre Manufacturers? Association (Atma).

One, the Board had discounted the monsoon effect, when formulating the initial production estimates. It had counted on 2.4% production growth. Instead, the growth was nil. Two, the Board had made its estimates factoring in just 4% growth in consumption. The growth, however, turned out to be higher at 6%. ?Our estimates show that consumption-production gap is yawning wider than ever,? D Ravindran, director-general, Atma told FE. ?Factoring in the 6% consumption growth, Atma forsees the rubber imports totalling to 1.2 lakh tonne to 1.3 lakh tonne in 2007-08,? said Ravindran. At Rs 92 per kilo for RSS-4, the domestic price and international price of NR are on a neck-on-neck race. In a frantic fire-fighting effort against the propaganda that rains and fever-hit labour had made a huge dent in rubber supply position, Rubber Board had officially stated last week that fall in production does not translate into insufficient stocks. On July 31, 2007, the country enjoys NR stocks to the tune of one lakh tonne, said Rubber Board chairman Sajan Peter. ?Large-scale import during last year’ had built up the stocks,? Sajan Peter added.

The market tug-of-war has entered a steamy bargaining phase, mainly because tyre majors are running on skelton-thin inventories now. Trade experts predict that hunger for pre

Onam liquidity is likely to trigger more farm-to-bourse movement of stocks. To a small extent this can cool down the tyre giants? avowed 1.3-lakh tonne import appetite.