The All India Rubber Industries Association (AIRIA) said manufacturing units using rubber were facing problems because of the volatility in the price of natural rubber and the inadequate availability of natural rubber. | |
| The price volatility would retard growth and hit production plans, it warned. |
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| AIRIA quoted a study made by Rubber Research Institute of India which said that spread of the Chikanguniya disease had affected tappers while continuous rains also impacted tapping. |
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| This led to loss of 50,000 ton of NR in the first five months of this fiscal year. |
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| Rubber Board has estimated growth in production of Natural Rubber during 2008 at 3.6 per cent, while the consumption growth will be to the tune of 4 per cent and in 2009 consumption is expected to grow by 4.8 per cent, while output growth is placed at 3.6 per cent, as reported in the press. The president of AIRIA, M F Vohra, commented, "While consumption of Natural Rubber outstripping its production coupled with the loss of production during the last few months may lead to non-availability of NR to the extent of 1 lakh ton and may further lead spurt in prices. To overcome the situation the industry need to depend on imports which again becomes prohibitive with 20 per cent import duty levied on import of natural rubber and 70 per cent on rubber latex." |
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| The avowed policy of the Government is to fix the duty for raw materials lower than the duty on finished products, the reverse however, happened in case of import of natural rubber and rubber latex. |
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| Where the duties on the finished rubber products have been brought down to 10 per cent, duties on natural rubber and latex remained unaltered at 20 per cent and 70 per cent respectively. |
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| This inverted duty structure on NR and latex have been allowed to continue throughout the year. |
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| The Government of India formed the Hoda Committee to correct all these inverted duty structure. |
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| However no decision on duty reduction has been taken as yet. |
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| Meanwhile, considering the heavy shortage of NR, the industry has pleaded for duty free import of 1 lakh ton of NR for domestic production as 49800 ton of NR as imported under DEEC license are meant for export production and has no relevance to domestic demand. |
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| Vohra said in a release, "Since futures trading in Natural Rubber commenced during 2003-04, prices of natural rubber have steadily gone up. While the rubber industry has no qualms on the natural rubber prices being determined by market forces in an open market economy, the industry is averse to manipulation in prices as indulged by a section of traders due to natural rubber being included in the commodity list of futures trading." |
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| He said the association's representation to the government for removal of NR from the commodity list for futures trading has not yet been responded. |
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| AIRIA was a non-profit making body for promoting development of the rubber industry with over 1200 members affiliated and offices at Mumbai, New Delhi, Kolkatta, Chennai, Mumbai and Pune. |
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