Rubber imports move up

Natural rubber imports are poised for an all-time high in the current financial year, with as much as 7,000-7,500 tonnes arriving on a monthly average.

According to a projection by leading rubber traders, the total import would cross 90,000 tonnes, an all time high, in the 2007-08 financial year. As on October 23, total imports stood at 48,849 tonnes and may cross 50,000 tonnes by the end of this month.

During the first three weeks of the current month, nearly 9,350 tonnes were imported, indicating a sharp increase in the pace of imports.

The current high prices of NR here have forced rubber-based industries, especially tyre manufacturers, to adopt the import route through duty-free advance licences.

The Indian rubber-based industries are entitled to import 90,000 tonnes through the advance licence scheme against the export of finished goods.

Till September, the country imported 39,495 tonnes compared with 27,530 tonnes in the April-September period in the last financial year.

The Rubber Board had set a import limit of 60,000 tonnes in order to keep the price tags up in the local markets, though the total imports during 2006-07 stood at 89,699 tonnes, a 12-year high.

According to a section of traders, imports might even cross 95,000 tonnes this year. Currently, the global price of benchmark grade RSS-3 is lower by Rs 6-7 per kg, forcing industries to go for imports.

The domestic market crossed the Rs 100 mark last week and is bullish as rains disrupted tapping in most producing areas.

According to D Raveendran of Automotive Tyre Manufacturers Association (ATMA), imports are likely to touch 80,000 tonnes, but the variation in global and Indian prices would be a crucial factor in deciding the figure at the end of the financial year.

If the global prices remain lower in the next 4-5 months, imports could touch 95,000 -100,000 tonnes. The anticipated lower domestic production in the current financial year and the higher growth in consumption (5 per cent) have also forced the industry to import more rubber, he said.

"But pricing will be the crucial factor. If the domestic price goes below Rs 90 a kg and the international prices are higher, imports will come down," he said.

But the 16 per cent shortfall in production during the April - September period is a serious concern for the rubber-based industry.

According to Raveendran, the ATMA is seriously pressing to reduce the 20 per cent import duty on NR, the highest among non-agriculture products. The duty on finished products like tyre is only 10 per cent.

But there is strong resistance from growers, and the government cannot take a decision without considering the political impact, especially in Kerala.

Meanwhile, as on October 23, total rubber exports touched 17,317 tonnes, and may not reach the last year's figure of 48,000 tonnes this year.

THERE'S THE RUB

Total rubber imports could cross 90,000 tonnes, an all time high, in the 2007-08 financial year

As on October 23, total imports stood at 48,849 tonnes and may cross 50,000 tonnes by the end of this month

Currently, the international price of benchmark grade RSS-3 is lower by Rs 6-7 per kg, forcing industries to go for imports