Published On: Mon, May 4th, 2009

Natural rubber imports might double

As the gap between domestic and overseas price tags of natural rubber (NR) is widening on a day by day basis, a strong pressure is building for heavy import of the commodity. Currently, comparing today’s quote of bench mark grade RSS 4, the overseas market, especially Bangkok, is cheaper by Rs 22 a kg.

This will obviously lead to a sharp increase in the import of natural rubber in the current year. The fall in the supply of rubber, mainly because of heavy stocking by growers also lead the tyre majors to opt for the import route. According to Automotive Tyre Manufacturers Association (ATMA), it is likely that the import would be doubled this fiscal thanks to the cheaper availability of the commodity in foreign markets. According to sources at ATMA the import would be more than 160,000 tonne this year. In the last financial year, total import touched 79,927 tonne against 86,394 tonne in 2007-08.

In April – June period (first quarter of the current financial year), the import is likely to touch 50,000 tonne as a major chunk of the heavy orders already put up by the tyre companies would be delivered from May onwards. During Q1 of 2008-09, total import had been 20,233 tonne which was lower by 8.5 per cent than the 24,190 tonne in the same period of the previous financial year. It is not the price alone that makes the tyre industry to opt for imports, but the non-availability of the main input used in tyre making in the local markets.

Though the Rubber Board figures say that the total stock by 31st March, 2009 is 2,05,000 tonne, rubber is not available in Kottayam and Kochi, the two major markets of the commodity.

The industry sources say that if there is such a large stock in the country, why is rubber scarce in the local markets? Why are the growers and stockists reluctant to release their stock at a time when the local prices are higher by Rs 22 a kg than the global prices. Where is the huge stock being hidden? So the board’s estimates are not reliable at all when compared to the ground reality in the domestic market.

The latest estimates of the stockists and the industry clearly indicate that the stock would be lower than 1,50,000 tonne. ATMA also raised serious apprehension over the stock and the availability of natural rubber. It also raised a demand for the Rubber Board to physically verificy the stock in the country in order to ascertain the correct figures. Though they have not raised the demand officially, they have already intimated the issue to the office bearers of the board.

Meanwhile, export from the country has suffered seriously in the recent months. The total export was 45,538 tonne in 2008-09 and this is likely to fall below 20,000 tonne this year. During the first quarter of 2009-10, export would be meager as against 13,136 tonne in the first quarter of the last financial year.

 

Source: worldscrap.com