The stalemate in the rubber market is continuing as the crisis effected by the notification of minimum price has not been settled so far. No business is taking place in the market for the last ten days with the crisis intensifying as the Rubber Board issued a clarification that sheet rubber should not be traded below the price level of Rs 30.90 per kg.
According to the Central government notification issued on September 12, RSS 4 grade sheets should not be traded below Rs 32.07 per kg. All the other sheet grades classified as RSS 5 grade cannot be transacted below Rs 30.90 per kg. This had resulted in chaos in the rubber market.
Traders here told Business Standard that a lot of the sheet rubber are below the quality level of RSS 5 for which the current market price varies from Rs 24 to Rs 28 per kg and these cannot be sold at Rs 30.90 per kg. Of the total annual production of 6.3 lakh tonne, around 1 lakh tonne would be of offgrade variety, the traders said.
Small-scale growers mainly produce these sheets due to the lack of proper processing facility. They have demanded that the Rubber Board should allow them to sell these inferior quality sheets as offgrade sheets. But the Board is not inclined to permit this as it is against the Central government notification.
With the existing notification, traders cannot issue bills below Rs 30.90 per kg. According to N Radhakrishnan, president, Cochin Rubber Merchants Association, the notification is not in tune with the ground realities existing in the market. He suggested that permission should be given to consider the inferior quality sheets as offgrade variety.
The crisis has made the traders reluctant to stock rubber and this in turn has affected the growers badly. The market price of RSS 4 grade is also below the minimum price laid down by the government. Hence, industrial offtake has also slowed down.
Meanwhile, the state government has authorised Rubber Marketing Federation (Rubbermark) to procure rubber at a price tag of Rs 32.07. Rubbermark has started procuring rubber from today onwards. According to a federation statement, it will procure 1,000 kg of rubber on a weekly basis.
