Most of the units in Jalandhar and Amritsar have cut production by 40-50 per cent; among the worst-hit are sandal units (which uses rubber as raw material) in Jalandhar, with most units having closed operations because of the arrival of synthetic sandals, which are cheap compared to rubber ones. | |
| Also, due to sharp increases in prices, a majority of rubber-based small units are resorting to layoff. |
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| The price for RSS-4 rubber is Rs 95 per kg in Kottayam and Rs 105 per kg in Delhi, against the benchmark price fixed by the ministry of commerce at Rs 32.09 per kg. |
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| During the past six months, raw rubber prices have increased from Rs 61 per kg to Rs 105 per kg in Delhi. |
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| Jalandhar, which had been the hub of the rubber industry for four decades and where 300-400 units were functional, now has about 60-70 units. Furthermore, only 20-25 chappal units are operational, while 75-80 per cent of the units have downed shutters because of competition from synthetic slippers. |
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| Similarly, in Amritsar, only one-third of the units, 20-25, are operational. |
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| Sources in the industry say production is low in Kerala due to summer heat. |
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| Some said growers started hoarding rubber; they are expecting Rs 100 a kg. Besides, the export of natural raw rubber contributed to the problem. |
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| The director, Freedom Rubber Ltd (a cycle tyre manufacturing unit), Barinder Singh, said: "Under the present circumstances, fulfilling export obligations, with orders taken six months ago, is a losing proposition because the price quoted at the time of taking orders cannot be revised. We have cut production by 40 per cent and our export has suffered almost by 25 per cent." |
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| The chairman, Vinko Auto Industries Ltd, Mukand Rai Gupta, said, "The industry is facing an acute shortage of labour, and the sharp increase in rubber prices is a double blow to units manufacturing transmission belts, tyres and even sport goods. We have cut production by 40-50 per cent." |
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| The online trading of natural raw rubber had aggravated the problem, he said. |
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| "Manufacturers have to take a licence from the Rubber Board, Kottayam, but as far as online trading is concerned, no such documentation is required. The investor has to pay about 2.5 per cent as margin money for trading," he said. |
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| Gupta said the government should suspend the export of natural rubber, and import natural rubber. |
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| Secondly, it was necessary to reduce import duty on natural or latex rubber to 0 per cent from 20 per cent. |
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| "The government should also consider setting up a stabilisation fund for the rubber-consuming industry, similar to the one set up for growers, so that when prices shoot up alarmingly, some relief may be provided," Gupta added. |
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