Rubber imports fall as domestic prices dip

The gap between local and global prices of natural rubber (NR) has narrowed down substantially, arresting the flow of imported rubber temporarily. The Kochi market quoted Rs 106.50 a kg for benchmark grade RSS-4 while the same is available for Rs 105.75 in the international market.

Owing to the wide gap between the national and international prices, there was a steep rise in imports during the April-August period. During this period, 98,946 tonnes were imported against 27,722 tonnes in the same period in 2008-09. As on September 18, total imports were 107,800 tonnes.

The price of SMR-20 grade has increased to Rs 100 a kg in the international market, while this is available at Rs 96 a kg in the local market. Therefore, the imports have turned out to be an unviable option for the industry, especially for the tyre manufacturers.

Moreover, the industry has almost utilised the duty-free import through the advance license scheme. Rubber-based industry is entitled to import around 125,000 tonnes annually through this route and 90 per cent of this has already been utilised. So now, import can be done only by remitting 20 per cent duty. This will not be a viable option at the current level of prices in the international market. Hence, no significant rise in imports during the latter half of this financial year is expected.