Govt regulating import of natural rubber to help growers, says minister

The most-active December contract of rubber hit a three-month low of Rs 11,751 per 100 kg on Indian Commodity Exchange

The government said that it has taken various measures to help rubber growers. These include regulating the import of natural rubber and increasing the import duty on dry rubber. The development comes against the backdrop of falling prices, which are impacting the rubber farmers.

The most-active December contract of rubber hit a three-month low of Rs 11,751 per 100 kg on the Indian Commodity Exchange, tracking a fall in prices of natural rubber in the key spot markets of Kerala, traders said. The December contract settled at Rs 11,771 per 100 kg, down 1.3%, said reports. Rubber prices in the spot markets of Kerala fell further on Tuesday due to low demand from tyre companies. The demand from tyre companies was low as they bought rubber in huge quantities when the supply was very tight during the monsoon, agency reports quoted traders.

Meanwhile, Minister of State for Commerce & Industry C R  Chaudhary, in a written reply in the Lok Sabha on Monday, said that domestic rubber prices are highly sensitive to the import of natural rubber.

To regulate the import of natural rubber, the government has increased duty on the import of dry rubber from 20 per cent or Rs 30 per kg whichever is lower to 25 per cent or Rs 30 per kg whichever is lower from April 30, 2015, in order to create demand for locally produced rubber.

The Government has also reduced the period of utilisation of imported dry rubber under advance licensing/ authorization scheme from 18 months to six months.

Director General of Foreign Trade (DGFT) has imposed the port restriction on the import of natural rubber by restricting the port entry to Chennai and Nhava Sheva (Jawaharlal Nehru Port) since January 2016.

Rubber Board's provisional data shows, while natural rubber production rose by 8 per cent to 67,000 tonnes during in October, imports increased by 63 per cent to over 62,000 tonnes from 38,048 tonnes, while exports dropped to nil from 479 tonnes during the period under review.

Natural rubber consumption also rose to 102,000 tonnes last month from 89,000 tonnes in the same month last year.

During the April-October period of 2018-19 fiscal, natural rubber production fell to 344,000 tonnes from 382,000 tonnes in the corresponding period of the previous year. The consumption, however, rose to 7,16,040 tonnes from 6,17,960 tonnes. 

Imports jumped to 3,56,255 tonnes during April-October 2018 from 2,63,221 tonnes in the corresponding period of last fiscal. In contrast, exports were down to 433 tonnes from 4,687 tonnes.

Rubber production incentive scheme is under implementation in the major rubber growing state of Kerala for providing financial support to rubber growers under which the difference between the scheme reference price of Rs 150 per kg and the daily market price is credited to the bank account of the farmer directly on the basis of purchase bills.

The Minister added, the government has no proposal for opening of industrial parks for rubber-based units.