The prices of natural rubber has increased by about 10 per cent since last week, despite the rates being soft in the global market. Prices at Kottayam in Kerala, a major rubber producing centre, for the RSS-IV grade has gone up from Rs 4,050 a quintal last week to Rs 4,800 a quintal, while rates of ungraded rubber has increased from Rs 3,875 a quintal to Rs 4,300 a quintal.
The price rise has left the consuming industry worried at a time when they themselves are facing a downtrend but the Union government and growers feel there is nothing abnormal in the hike. An official source said the increase in prices was a "natural corrective trend" since they had been "lagging" until last week.
Prices of natural rubber, which had been ruling around Rs 5,000 a quintal during the same period last year, once touching a high of Rs 6,200 a quintal, had declined to less than Rs 3,900 a quintal, the source said, adding the government was, however, watching the situation.
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"There is nothing surprising in the price increase as this is a lean season," plantation industry sources said.
The sources said the prices have increased only because of the intervention of the government, which had procured rubber through the State Trading Corporation (STC). The official source, however, denied any intervention on
the part of the government. They said in February, during a call attention motion in Parliament on depressed prices for natural rubber, Union minister of state for commerce B B Ramaiah had said the STC was in the picture of procuring rubber as part of its "normal commercial operations" in collaboration with the Kerala State Co-operative Rubber Producers' Federation (Rubbermark).
Industry sources charged that after a showdown between Union finance minister P Chidambaram and Congress MP J Kurien during the introduction of the finance bill on May 7, the government had ordered the STC to make bulk purchases.
An STC official said no such orders have been passed on to the corporation and the organisation had bought 100 tonnes of rubber last year as part of its normal operations STC had started making purchases for exports, imports and domestic sales, the official said.
No question of allowing imports
Union minister of state for commerce B B Ramaiah said yesterday that there was no question of the centre allowing import of rubber unless the price of the commodity and its demand shot up alarmingly
"We have refused the request of the tyre industry to import rubber," the minister told a press conference in Thiruvananthapuram.
The centre and the rubber board were keeping a close watch on the situation, the minister said It was to ensure a fair price to farmers. that the centre askedSTC and the rubber marketing federation to procure rubber from farmers.