Farmers oppose demand for ban on rubber exports

The Automotive Tyre Manufacturers Association's (ATMA) demand for one year ban on export of natural rubber (NR) has drawn flak from various organisations of farmers and traders in the state.

ATMA has also demanded a cut in the import duty from 20 per cent to 10 per cent and imposition of cess on export in order to put a cap on rubber exports, which increased by 73,000 tonne in 2005-06. The demand comes in the wake of skyrocketing domestic rubber prices.

But, the Central government has vehemently turned down ATMA's demand.

In a press statement issued here, the Indian Rubber Dealers Federation (IRDF) said that growers got ridiculously low price during 1999-2002 when the total outstanding stock in the domestic market had grown to more than 2 lakh tonnes.

George Vally, president, and N Radhakrishnan, vice-president, IRDF, accused the tyre industry of importing rubber freely even during glut to bring down prices in the domestic market.

"They succeeded in their endeavour to such an extent that domestic price of NR nosedived to Rs 25 a kg. Excessive quantities of rubber had been removed from the market thanks to the export incentive announced by the government and also due to the efforts by various agencies like Rubbermark, Rubco and Infam.

Exporters too suffered huge loss during that period. They said that industry had kept on importing rubber with the intention of controlling prices in the domestic market. During this period, the total imports touched a staggering 182,773 tonnes.

Thanks to the upswing in global prices, domestic prices have also gone up during last one year. Still, the tyre industry is getting rubber at Rs 14-15 per kg lower in the domestic market than those in global market.

They contended that growers in the state lost Rs 600 crore by selling rubber at lower prices during the last one year period.

The industry is unwilling to import under a duty free regime against advance licences due to high prices in international market. They said that they would not allow a repetition of the 1995-2000 when price had fallen to Rs 25 per kg.

"After suffering losses for so many years and piling up debts, the growers have been getting remunerative prices only since the end of 2005."

The government is unlikely to concede the ATMA demand considering the widespread resentment among rubber growers in the state.