Tyre cos again seek rubber imports.

KOCHI: The high decibel campaign launched by rubber growers and the user-industries to protect their respective interests in the context of the accelerating prices has brought into sharp focus their conflicting stands on rubber imports and stocks. Rubber prices touched record levels as it rose 22% in the past couple of months.

As on Wednesday the prices are higher than the international price level by almost Rs 20 per kg. Apart from the high prices, the user-industries have also been complaining about the non-availability of rubber.

The rubber dealers, who have been purchasing rubber on behalf of the industry, say that rubber is not coming into the market. Though these developments prompted the industry to disagree with the Rubber Board’s estimate of stock of natural rubber, a study done by IIPM- Bangalore later verified the stock data and found that the rubber estimates are right, sources in Rubber Board said.

In fact, the industry on Tuesday questioned the consumption and production estimates of rubber done by the Rubber Board.

Rajiv Budhraja, director general, Automotive Tyre Manufacturers Association, said, “the production of natural rubber in the country lagged behind consumption by 100,000 tonne in 2009-10. In 2011, natural rubber production is likely to lag behind consumption by 1,76,000 tonne”.

As against this, the Rubber Board’s estimate of deficit this year is 85,000 tonne. The industry has assumed a growth rate in consumption of 12-15% while the Rubber Board’s estimate of growth rate is only 5-6%.

According to the industry spokesmen, several new companies are setting up units in the next couple of years, generating an investment of Rs 12,000 crore.

The industry has, therefore, approached the government for importing 2 lakh tonne of rubber duty free. “The inverted duty structure in rubber should be corrected by reducing the customs duty of rubber to 7.5%”, he said.

Source : Economic Times