See huge arbitrage opportunities as imports may double this yr.
The import of natural rubber (NR) has crossed the 85,000-tonne mark to reach 85,424 tonnes as on August 6. In the fourth month of the current financial year, the import figure has already crossed last year’s imported volume of 79,927 tonnes. It is almost certain that imports this year would be more than double the quantity imported during the last financial year.
During April-July, total imports were 70,328 tonnes against 23,878 tonnes in the same period of 2008-09. Imports in July alone were 20,412 tonnes against 2,589 tonnes in July last year.
The wide gap between local and international prices during March-June this year is the main reason behind the huge rubber imports in the country. The local tags were higher by Rs 17 a kg compared to global prices. Due to this, the rubber-based industry, especially automotive tyre manufacturers, imported more rubber.
The current increase in rubber import is based on orders placed during April-June. The huge gap in prices has narrowed down now, though domestic tags are still higher by Rs 5-6 a kg. Hence, the quantum of import is expected to be regulated in the coming months. There might be a slowdown in imports during September-December owing to the start of the production season in India. Still imports, especially through the advance licence scheme, would be a more lucrative route for users of the commodity.
Meanwhile, the export front is struggling hard to supply a minimum quantity to overseas markets. But the month of July went without any export of the commodity. In June, only 38 tonnes were exported while the cumulative export in the April-July period was to the tune of 878 tonnes against 9,299 tonnes in the same period in the last financial year.
The sharp rise in imports and a decline in exports have resulted in the total stock of the commodity going up in the country. The stock as on July 31 this year was 183,270 tonnes against 115,146 tonnes on July 31, 2008.
Meanwhile, total output in April-July has dropped by 13 per cent to 209,825 tonnes against 242,115 tonnes in the same period of last year. Consumption has edged up by 1.2 per cent to 296,220 tonnes against 292,840 tonnes in the same period last year.
