Allow 1 lakh tonne duty-free import of natural rubber

Kolkata, Nov 12 The All India Rubber Industries Association (AIRIA), concerned over both volatility in the prices of natural rubber and inadequate domestic availability of natural rubber, has sought duty-free import of one lakh tonnes of natural rubber for domestic production of rubber goods, as “49,800 tonnes of natural rubber as imported under DEEC licence are meant for export production and have no relevance to domestic demand”.

According to Mr M.F. Vohra, President of AIRIA, consumption of natural rubber outstripping its production, coupled with loss of production in the last few months, may lead to non-availability of natural rubber to the extent of one lakh tonnes. He felt this may lead to further spurt in prices.

Citing a recent study of the Rubber Research Institute of India, he said owing to Chikungunya affecting tappers and excessive Kerala rains making tapping difficult, some 50,000 tonnes of natural rubber was lost during the first five months of the current fiscal.

The Rubber Board, according to AIRIA, has estimated the growth in natural rubber production during 2007-08 at 3.6 per cent against a consumption growth of 4 per cent. In 2009, Mr Vohra said, consumption was expected to grow by 4.8 per cent, while production growth is expected to remain at 3.6 per cent.

He said in order to overcome this problem, the rubber goods industry needs to depend on imports, which again become prohibitive with the 20 per cent import duty levied on natural rubber and 70 per cent on Rubber Latex. According to Mr Vohra, ever since futures trading in natural rubber commenced (since 2003-04), prices of the commodity have steadily gone up.

“While the rubber industry has no qualms about natural rubber prices being determined by market forces in an open market economy, the industry is averse to manipulation in prices as indulged in by a section of traders owing to natural rubber being included in the commodity list of futures trading.”

He said response to the representation for removal of natural rubber from the commodity list of futures trading was still awaited.