MUMBAI, Feb 2 (Reuters) - India's natural rubber imports are set to fall from March as Thailand's move to intervene in the market has pushed up world prices making overseas buying expensive for Indian tyre makers, industry officials said.
Thailand government's decision last week to buy rubber from local farmers lifted prices in exporting countries like Indonesia.
Indian tyre makers raised imports during November to January as they were getting natural rubber at lower price overseas compared to local market.
"There is no import parity at current level. Rubber is cheap in local market," George Valy, president of The Indian Rubber Dealers Federation said.
Spot price of the most traded RSS-4 rubber (ribbed, smoked sheet) at the Kochi market in India's Kerala state was 188 rupees ($3.83) per kg on Thursday, while it was 199 rupees in Bangkok, Thailand, data with Indian Rubber Board showed.
Thailand approved a 15 billion baht ($477 million) budget, on Jan. 24, to buy unsmoked rubber sheet (USS3) from farmers at 120 baht ($3.82) per kg in a bid to prop up prices.
"We are expecting some imported rubber this month which we had ordered in December," said an official at one of the leading Indian tyre makers.
"But, we are not placing new orders as after calculating price and freight, imports become expensive."
In December 2011, India imported 21,734 tonnes of natural rubber, up 57 percent on year, state-run Rubber Board said. Imports in January and February are also likely to be higher than last year, Valy said.
India, the world's fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
Tyre makers trimmed purchases in the local market in November-January period due to higher imports, but going forward they will raise purchases, said Ibrahim Jalal, treasurer of IRDF.
"Supply situation is very comfortable in local market. In November to January period production was robust. So tyre makers can easily get required quantity from local market," Jalal said.
The country's rubber production in first nine months of the financial year ending March 31, 2012 stood at 679,100 tonnes, up 4.3 percent on a year ago.
The Board has estimated the country's production for the current financial year at record 902,000 tonnes, higher than 861,950 tonnes produced in the previous year.
The benchmark March rubber on India's National Multi-Commodity Exchange was down 0.7 percent at 19,240 rupees per 100 kg by 1023 GMT.
Source : biz.thestar.com