Rubber prices down 9% since August 6

Rubber prices in the domestic market have declined more than nine per cent to Rs 170 a kg since August 6 over fears that the government will cap the import duty on the commodity.

“The government is going to fix the cap on import duty at Rs 20 a kg, which will lead to a decline in import duty from the present level of Rs 30 a kg,” said All-India Rubber Dealer Federation President George Valy. He said the proposal for capping the import duty on rubber had led to a sharp decline in rubber prices in the domestic market.

 

Rubber prices in the domestic market have declined from Rs 186 a kg on August 6 to Rs 170 a kg and it is expected that in a few days, they may come down further to Rs 160 a kg. Before this, the prices in the international market stood around Rs 150 a kg, but with the development, they went up to Rs 160 a kg, he said.

An expert panel had earlier recommended that the import duty should be retained at 20 per cent, but a maximum ceiling of Rs 20.46 should be fixed, based on the average domestic price of rubber for the last three financial years. The recommendation was made after hearing the views of consumer industries and submissions by the grower organisations.

Rubber growers feared that the reduction might lead to dumping of cheap natural rubber from the ASEAN countries, which could have a cascading effect on prices of natural rubber, resulting in a drastic fall in prices in the domestic market.

India imported 15,372 tonnes natural rubber in May this year, compared to 17,976 tonnes in the same month last year. Domestic rubber goods manufacturing industries consumed 79,150 tonnes natural rubber in May this year vis-a-vis 78,250 tonnes in April.

Imports in the first two months amounted to 26,248 tonnes as against 27,719 tonnes in the corresponding period last year. Consumption grew 8.8 per cent in the first two months to 157,400 tonnes vis-a-vis the same period last year.