)
A free fall in the prices of natural rubber has put both growers and dealers in a dilemma. Expressing their token protest at the rubber industry, especially tyre makers, rubber dealers of Kerala downed their shutters for a day on Monday. Prices dropped eight per cent in a couple of weeks.
Indian Rubber Dealers Federation (IRDF) president, George Valy told Business Standard around 8,500 dealers across Kerala and Tamil Nadu had closed on Monday, citing various demands.
The market crashed Rs 14 a kg during the last two weeks, taking the price of the benchmark grade RSS-4 to Rs 172 a kg. The local market is moving in the with global counters, as there is dearth in demand across the world. The Bangkok market on Monday quoted Rs 159 a kg, Rs 13 lower than the domestic rate.
According to experts, there is a serious slowdown in demand for natural rubber, especially in Europe, and this had badly hit the price line, too. For the last one week, major tyre companies are keeping away from the local markets as the import route is more viable for them. Also, there is good inventory with them and demand for rubber in the local market has been negligible for the last one week.
Since aborad prices are lower than in India, during April-August, 128,465 tonnes were brought in against 97,862 tonnes a year ago. A 102 per cent increase in import was recorded in August at 40,809 tonnes, thanks to the price advantage. On an average, the international price was lower by Rs 15 a kg than India, which is rather comfortable for the local industries at the prevailing duty structure.
IRDF demands that the government procure rubber unless the industry stepps in within the next couple of days. George said the import duty should be raised to Rs 34 a kg from the current Rs 20 a kg with immediate effect. This was assured by Union commerce minister, Anand Sharma this April when he visited Kerala. He also said till September, in this financial year, total import crossed 160,000 tonnes, an all-time high. So, imports should be regulated.
The federation also urged the Forward Markets Commission and the government that transparency be maintained in futures trading. Futures trading should be stopped on Saturdays, in line with metals. Late hour trading should not be implemented in the case of natural rubber.
The International Rubber Study Group (IRSG) trimmed global demand growth outlook to 3.8 per cent for this year, down from its previous projection for a four per cent due to lingering worries about consumption in recession-struck Europe.
IRSG pegged global demand for rubber at 27 million tonns (both natural and sunthetic) for 2013, down from its prior estimate of 27.7 million tonnes.
The group expects global natural rubber production to rise 3.5 per cent in 2013 to 11.7 million tonnes, with an estimated surplus of 284,000 tonnes.
Also, production has picked up in almost all parts of Kerala as the climate is better currently. So, supply is rather high, but the market desperately in need of takers. This is the main reason for the fall in price for the last couple of weeks, said N Radhakrishnan, a leading dealer and former president of Cochin Rubber Merchants Association.
Indian Rubber Dealers Federation (IRDF) president, George Valy told Business Standard around 8,500 dealers across Kerala and Tamil Nadu had closed on Monday, citing various demands.
The market crashed Rs 14 a kg during the last two weeks, taking the price of the benchmark grade RSS-4 to Rs 172 a kg. The local market is moving in the with global counters, as there is dearth in demand across the world. The Bangkok market on Monday quoted Rs 159 a kg, Rs 13 lower than the domestic rate.
According to experts, there is a serious slowdown in demand for natural rubber, especially in Europe, and this had badly hit the price line, too. For the last one week, major tyre companies are keeping away from the local markets as the import route is more viable for them. Also, there is good inventory with them and demand for rubber in the local market has been negligible for the last one week.
Since aborad prices are lower than in India, during April-August, 128,465 tonnes were brought in against 97,862 tonnes a year ago. A 102 per cent increase in import was recorded in August at 40,809 tonnes, thanks to the price advantage. On an average, the international price was lower by Rs 15 a kg than India, which is rather comfortable for the local industries at the prevailing duty structure.
IRDF demands that the government procure rubber unless the industry stepps in within the next couple of days. George said the import duty should be raised to Rs 34 a kg from the current Rs 20 a kg with immediate effect. This was assured by Union commerce minister, Anand Sharma this April when he visited Kerala. He also said till September, in this financial year, total import crossed 160,000 tonnes, an all-time high. So, imports should be regulated.
The federation also urged the Forward Markets Commission and the government that transparency be maintained in futures trading. Futures trading should be stopped on Saturdays, in line with metals. Late hour trading should not be implemented in the case of natural rubber.
The International Rubber Study Group (IRSG) trimmed global demand growth outlook to 3.8 per cent for this year, down from its previous projection for a four per cent due to lingering worries about consumption in recession-struck Europe.
IRSG pegged global demand for rubber at 27 million tonns (both natural and sunthetic) for 2013, down from its prior estimate of 27.7 million tonnes.
The group expects global natural rubber production to rise 3.5 per cent in 2013 to 11.7 million tonnes, with an estimated surplus of 284,000 tonnes.
Also, production has picked up in almost all parts of Kerala as the climate is better currently. So, supply is rather high, but the market desperately in need of takers. This is the main reason for the fall in price for the last couple of weeks, said N Radhakrishnan, a leading dealer and former president of Cochin Rubber Merchants Association.
