India: New rubber import deals slow.

Indian tyre manufacturers have reportedly stopped signing new natural rubber import deals. Reuters, citing two dealers and a trade official, said this is so because they are getting the raw material more than 15% cheaper in the local market.

India mainly imports rubber from Thailand, Malaysia and Indonesia. Domestically, the southern Indian state of Kerala is the largest rubber producing state in the country. India is the fourth-largest rubber producer.

On 3 December, the spot price of RSS-4 (ribbed smoked sheet) rubber was Rs197 (US$4.36) per kg in India, whereas in Bangkok, the price was around Rs203. According to the report, the spot rubber price in India has risen by 1% in the past month, while in international markets the rise is around 9%.

"Rubber is at least 15% cheaper in Indian market if you add import duty and freight charges, and calculate landed cost of imported rubber," Reuters quotes George Valy, president of The Indian Rubber Dealers Federation, as saying.

The import on natural rubber into India draws duty of 20%. In August, Indian rubber manufacturers were charging a premium of Rs35 per kg over the Bangkok market. This led to tyre companies signing import deals for shipment in the September-December 2010 period, the report said.

"Now the scenario is exactly the opposite. No one is signing import deals. Still we are getting rubber from old contracts. That will continue for next one month, but if the scenario remains the same, imports will be very low in January to March period," the newswire quotes a dealer based in Kerala as saying.

Natural rubber imports into India in the first eight months of the current fiscal year stand at 143,468 tonnes. Compared with the corresponding eight-month period in the previous fiscal, this is an increase of 3%, which was due to lower local output than was expected. For the full financial year, India will likely produce 850,000 tonnes of natural rubber, down 4.8% on the earlier estimate owing to heavy unseasonal rains, the report said, citing a senior Rubber Board official.

Meanwhile, India's tyre production is expected at around 121.4 million units in fiscal 2010-11, according to an estimate by the country's Automotive Tyre Manufacturers' Association (ATMA).

Source : automotiveworld.com