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Rubber import likely to surge on high domestic prices |
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Mumbai: India is likely to import 110,000 tonne of natural rubber in 2010-11 as record-high local prices forced tyre makers to source more raw material from abroad, a Rubber Board official said.
This is higher than the board's April estimate of 70,000 tonne of imports for the year, but lower than 2009-10's imports of 1,71,000 tonne, according to Rubber Board data.
“Going by the current trend, we are expecting imports of over 110,000 tonne this year,” a senior Rubber Board official, who declined to be named, said on Tuesday.
“The world's fourth-biggest rubber producer has imported 57,872 tonne of natural rubber between April 1 and August 7,” the official said.
Local rubber prices have nearly doubled in the past year on a drop in output due to drought coupled with rising demand from from tyre-makers struggling to cope with a boom in the auto industry.
India usually imports rubber from Thailand, Malaysia and Indonesia.
The Board had in April estimated imports for the year at 70,000 tonne, when the spot rubber price was Rs 16,000 ($345) per 100 kg.
The price last week hit a record high of Rs 18,600, widening the difference between Indian and global prices.
Industry officials, however, said the imports in 2010-11 would be even higher than 110,000 tonne as rubber is much cheaper in the overseas markets and domestic demand is also robust.
“International prices are Rs 30-35 (a kg) lower than domestic prices. Imported rubber is cheaper despite a 20% import duty,” George Valy, president of The Indian Rubber Dealers Federation, said.
“Imports would be very high if government cuts import duty. They may rise to 200,000 tonne,” he added.
The Rubber Board estimates output in India to rise by 7.5% to 893,000 tonne in 2010-11 and consumption by 5% to 978,000 tonne.
Tokyo's benchmark rubber contract slipped a little on Tuesday as a weak oil price triggered stop-loss selling, but a pause in the yen's rise against the dollar helped limit losses, dealers said.
Source : financialexpress.com
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