Tyre-makers may raise rubber imports.

KOCHI: Tyre-makers in India are expected to raise their natural rubber imports to cash in on a global fall in prices and counter the supply crunch at home.

Last year, when natural rubber production in India had fallen to its lowest in a decade at 5.62 lakh tonne, imports had soared to a record 4.58 lakh tonne. Though the Rubber Board estimates a 2.3% year-on-year rise in output in the first quarter, traders say arrivals in the market are poor.

"As per the board's estimate, the stock is over 2 lakh tonne. What defies logic is that people are not offloading despite prices being higher in the off-peak period. This shows that the stock position shown by the board may not be correct," said Rajiv Budhraja, director general at Automotive Tyre Manufacturers' Association. The peak production phase of rubber starts next month. The current domestic price of Rs 144 a kg is about Rs 15 higher than sheet rubber price in the global market.

Global prices jumped by Rs 12 to Rs 131 per kg in the last week of July before retracting to previous levels.

"The industry will depend more on imports as the output of 6.54 lakh tonne projected by the Rubber Board may not be achieved. It is likely to be under 6 lakh tonne. Moreover, crumb rubber available at Rs85 per kg overseas is cheaper even with the 25% duty and is better in quality," said N Radhakrishnan, a trader.

Imports could touch 4 lakh tonne as production is likely to be 6 lakh tonne while the projected consumption is 1 million tonne. Three of the world's biggest natural rubber producers-—Thailand, Indonesia and Malaysia— are set to meet next week to review their export restrictions.

Source : economictimes.indiatimes.com