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As natural rubber prices skid and imports soar, its agitated planters seek safeguards in the form of hike in import or anti-dumping duty to sustain their business in face of rising production costs and wage increase.
Rubber price (RSS-4 variety) plunged 46% to below Rs.130 per kg in August 2014 from Rs.243 per kg in April 2011, owing to surge in imports from Indonesia and Vietnam, which shot up 37% to 360,287 tonnes in fiscal 2013-14 from 262,751 tonnes in 2012-13.
“The rubber industry has been doing badly since 2011, as prices have been sliding over the last 40 months. Secondly, Imports have not only been rising, but also have seen a shift in sourcing from Indonesia and Vietnam than Thailand,” R Sanjith, Head of Commodities, United Planters’ Association of Southern India (UPASI) told Business Standard on the eve of its 121st annual conference here.
In terms of variety too, the user industry is seen moving from ribbed smoke sheet (RSS) to technically specified rubber (TSR). Prices of the raw material (rubber) imported from Indonesia and Vietnam, are not known vis-à-vis Thailand, wherefrom it was imported earlier in large quantities.
Even after paying 20% import duty, the commodity’s price is quoted much lower than its domestic variety, resulting in slump for the native rubber.
“We have asked the central government to slap higher duty or anti-dumping duty to safeguard interests of our growers. We have also asked for revising the standard import and output norm so that they can check imports,” he said.
As a million strong rubber planters are finding it difficult to grow more rubber, UPASI urged the government to impose safeguard duty to check imports.
According to UPASI, rubber imports have jumped 68% to 100,480 tonnes in the first quarter ending June 30, 2014 from 59,933 tonnes in the like period last fiscal. Industrial users import SMR-20 grade, which is cheaper in the global market.
“If the price decline continues, majority of planters will be forced to abandon rubber cultivation or switch over to other activities. In this background, UPASI wants the government to impose safeguard duty on NR imports to India,” Sanjith said.
According to early indications, the trend to import will continue, suggesting a plausibility of record imports, he added.
The planters have also asked the government to scrutinise norms in fixing the import quantum under the advance licensing scheme or duty exemption entitlement certificate (DEEC) fixed on the standard input-output norm.
