Notwithstanding the import duty cut on natural rubber, Apollo Tyres today said it may hike the prices of its products in coming days in order to offset affect on margins.
"Our margins are under pressure because of very high prices of natural rubber. We are currently looking at increasing our product prices," Apollo Tyres Chief Financial Officer Sunam Sarkar told PTI.
He, however, declined to share the possible quantum of price hike that the company is likely to undertake.
"We have to evaluate the recent reduction of import duty on natural rubber and how much we can import," Sarkar said.
The government yesterday cut import duty on natural rubber to 7.5 per cent from 20 per cent for shipments up to 40,000 tonnes till March 31, 2011, to boost domestic supply and check rising prices that touched record Rs 207 a kg.
Sarkar said there will not be any immediate positive impact on domestic manufacturing as well as retail prices as international rubber rates are also hovering very high.
"Over a period of time prices may come down," he added.
The company has raised the prices of tyres by 10-12 per cent in 2010. The last time it hiked the rates was in July and it stood at 3-3.5 per cent across all products.
In May this year tyre manufacturers had said they would have to hike product prices by up to 25 per cent to offset rising input costs.
Another tyre maker Bridgestone said it has raised the prices by about two per cent this month.
"Input costs are increasing and after a point we are forced to hike price. In December, the company has taken an increase of about two per cent. Going ahead, we will see how the input costs are and take a decision accordingly," Bridgestone India Managing Director Hiromi Tanigawa said.
Natural rubber prices are on a gaining spree for the past few months due to continuous rain in central Kerala and in Malabar region which adversely affected tapping, according to Rubber Dealers Federation of India.
As per the government notification, the natural rubber import beyond March 31, 2011, will attract duty of 20 per cent or Rs 20 per kg, whichever is lower.
It is an irony that the natural rubber was attracting import duty of 20 per cent, whereas only 10 per cent duty was applicable on the import of finished tyres from China.
