The government plans to sell the 10,000 tonne of natural rubber procured through the State Trading Corporation (STC) to domestic rubber goods manufacturers against advance import licences instead of exporting the commodity, a commerce ministry official said.
We do not have plans to export rubber since domestic prices are on par with international prices. We also do not plan to release the 10,000 rubber procured by STC in the domestic market but we will offer it to domestic manufacturers if they are willing to surrender their advance licences, the official said.
Government had procured rubber during the financial year 1997-98 as part of its market intervention operations after natural rubber prices slid to a three-year low. Despite the procurement, made by STC through Kerala Rubber Growers Co-operative Marketing Federation (Rubber-mark), prices are dormant with rates for RSS Four grade closing at Rs 2600 a quintal on Saturday.
Rubber prices have nosedived since 1997 second quarter on general recession in the industry, the transport sector in particular, and production outstripping consumption. Exports were considered unviable initially since global rubber prices were lower than domestic prices but since December the situation has become vice-versa.
In the global market, prices for RSS Three grade, the one comparable with Indias RSS Four, closed at Rs 3048 a quintal on Friday. Though domestic rubber prices are ruling low, the landed cost of the commodity if exported would be on par with the international prices, official sources say.
You will have to take into account the freight charges for export, they said.
The commerce ministry official said in order to facilitate sale of procured rubber to domestic manufacturers, especially tyre units, the STC had begun negotiations with them.
