Rubber Growers Press For Lower Import Duty
The rubber growers' lobby in the country is pressing for a 10 per cent increase in the import duty on natural rubber to 30 per cent to strengthen domestic prices of natural rubber. Prime Minister H D Deve Gowda yesterday assured the lobbyists that he would look into the matter and is expected to call a meeting today of the ministries concerned.
Rubber prices have weakened considerably during the current fiscal from Rs 63 per kg to Rs 40 per kg, causing lower realisation for rubber farmers. The easing of prices was due to surplus availability of natural rubber during the year, which is close to 70,000 metric tonnes.
One of the lobbyists blamed the lower import duty on natural rubber for the surplus and called for an immediate hold on fresh imports. The government had lowered the duty on rubber to 20 per cent from 25 per cent last July.
The domestic consumption of natural rubber this year has been 5.6 lakh metric tonnes as against a domestic production of 5.85 lakh tonnes. Further, the country imported 27,000 metric tonne of natural rubber this year in addition to a carry over stock of about 16,000 metric tonnes.
The lobbyists suggested to the Prime Minister that agencies such as State Trading Corporations, NAFED and the Rubber Marketing Federation must be extended finance to buy excess produce from rubber farmers at remunerative prices to help ease their plight.
But the tyre companies, which during 1995-96 faced an acute shortage of natural rubber, their principal raw material, and a consequent steep rise in its price during that year, are confident of bringing down their overall production costs.
In addition to the decline in natural rubber prices, those of other key inputs, such as nylon tyre cord and carbon black, have also dropped in 1996-97, following a reduction in import duties on them.
But the tyre companies' final results may be overshadowed by the increase in petrol prices and the burden of the controversial minimum alternative tax applicable to some of the tyre companies.