Rubber users could import upto 30,000t

Industries depending on natural rubber (NR), especially automotive tyre manufacturers, would import substantial quantities of NR to keep production going at cost-competitive rates.

According to sources, tyre manufacturers would import 30,000 tonnes within next three months as the price of NR in the global market was substantially lower than the domestic market.

Automotive Tyre Manufacturers Association (ATMA) was yet to disclose the quantity of import but was pressing the government for removal of port restrictions in importing NR.

At present, NR could be imported only through Kolkata and Visakhapatanam ports.

It was estimated that at least 50,000 tonnes of NR would be imported in 2004-05, both through OGL and advance licence channels.

The industry was allowed to import 45,000 tonnes through the advance licence scheme within next 18 months. This, along with the import through the OGL, would bring down prices, according to experts.

Import through both the channels would help industry because of the recent crash in the global NR market.

The price of RSS 3 (Ribbed Smoked Sheet) grade, equivalent to RSS 4 in the local market, was Rs 57.50 per kilogram in the global market as of July 19. In India it cost Rs 67 a kg.

The average cost of importing and transporting NR to the factory was around Rs 74 a kg through OGL.

NR cost was Rs 57.50 a kg, import duty Rs 11.50, freight, insurance and port handling charge another Rs 3.50 and local transport added Rs 1.50 more.

If NR was bought from Indian markets, the cost would rise rose to Rs 79 as NR would cost Rs 67 per kg, with Rs 8.70 added for purchase tax and tax on cess, Rs 2.50 for transportation and 80 paise for local handling expense.

Through the advance licence scheme, the ex-factory cost would be Rs 62.50 per kg. There was also the advantage of getting credit for six months at the LIBOR rate in the International market.

According to traders, prices could fall further as the global market had been hit again by China's withdrawal from the market.

As the main producing season of October- December approached, there was a possibility of a further fall in prices by Rs 15-20 during the season beginning from October.