User industries ask PMO to intervene on rubber prices

In a sequel to the High Court of Delhi telling the Union government to consider rubber user industries’ plea for price controls on the crucial product, the rubber user industries have asked the Prime Minister’s Office to move swiftly on the matter.

Natural rubber prices continue to rise, by Rs 2-3 a kg every second day, goes the plea from the same three parties who’d petitioned the HC — the All India Rubber Industries Association (AIRIA), the Automotive Tyre Manufacturers Association and the Indian Cycle and Rickshaw Tyre Manufacturers Association.

Since May 10, when the benchmark grade RSS-4 variety ruled at Rs 151 a kg, the price had moved up to Rs 170 a kg on May 25, according to Rubber Board data.

“While the government is safeguarding the interests of rubber growers, the future of five million people employed in around 5,000 rubber units across the country has been grossly overlooked. Many such units, particularly those in the small and medium enterprises sector, are on the verge of closing down, as rubber prices continue to rise at an unprecedented pace, and even at such prices, adequate rubber is not available,” said T K Mukherjee, president of the AIRIA.

The petitioners complain the option of import of rubber is not feasible, as the government continues to charge a 20 per cent tariff on this, although finished rubber goods can be imported at less than 10 per cent duty.

According to the communication, the production of natural rubber in the country lagged consumption by 1,00,000 tonnes in 2009-10. In 2010-11, NR production is likely to lag consumption by 1,75,000 tonnes, it contends.

AIRIA has urged import of 2,00,000 tonnes of duty-free rubber to survive the shortage and to cool the rising prices.

The three associations had petitioned the HC in Delhi to order th government to regulate NR prices and also ban futures trading in it, beside some related measures. The HC order, given earlier this week, asked the government to consider the matter carefully and give detailed reasons for whatever action it chose to do or not do. Only after that, it said, would there be a case for asking the courts to intervene.