Indian Tyre Makers to Import over 30,000 T Rubber Oct-Dec.

That would put total imports for this fiscal year close to the 170,679 tonnes of 2009/10, when India's needs nearly doubled as domestic production was hit by a severe drought.

"Tyre makers have already signed deals for 30,000 tonnes of rubber imports because of the difference between domestic and international prices. In Thailand rubber was cheaper when they contracted," a dealer based in Kochi, in the southern state of Kerala, said.

In August, Indian rubber makers were charging a premium of as much as 35 rupees ($0.79) per kilogramme (kg) over the Bangkok market, prompting Indian tyre companies to buy rubber from overseas markets.

"Despite duty, overseas rubber was cheaper. Now the gap between domestic and international markets has come down, but tyre makers are likely to import to cater to their rising demand," the dealer said.

The world's fourth-biggest natural rubber producer currently charges 20 percent duty on the imports. India's imports between April-September stood at 107,190 tonnes, down 12 percent compared to 122,095 tonnes a year ago.

On Thursday, the Indian price was over 8 rupees higher per kg than Bangkok market, data with the state-run Rubber Board showed.

"Tyre companies will wait for the government to cut import tax on rubber and afterwards again they will start placing orders," said another dealer.

India may cut the tax on rubber imports to 20.46 rupees per kg from the current 20 percent levy, a government policy adviser said last month.

India's natural rubber production in 2010/11 is likely to fall short of the estimated 893,000 tonnes due to adverse weather conditions, Sajen Peter, chairman of the Rubber Board, said on Wednesday.

The Rubber Board estimates consumption in the country will rise by 5 percent to 978,000 tonnes in 2010/11.

Graphics on India's natural rubber consumption and imports here

"(Indian) tyre companies are inquiring for imports in first quarter of 2011. They want to contract before prices rise further," said a leading rubber exporter based in Thailand, the world's biggest exporter of natural rubber.

The global rubber market could see two years of tighter supplies and rising prices as output sputters while producers replace ageing trees and demand drives higher in a worldwide recovery, conference delegates said.

Tokyo rubber futures rose further on Thursday, hitting a five-month high on the back of tight supply in producing countries, but the gains were limited by the strength of the Japanese yen, dealers said.

Source : in.reuters.com