Steep fall in rubber on import duty cut

Steep fall in rubber on import duty cut

Kottayam, Aug. 19

Physical rubber prices declined sharply on Thursday. The news that the import duty of natural rubber has been reduced from 20 per cent to 7.5 per cent has created a panic situation in the market circles.

Sheet rubber nosedived to Rs 180 from Rs 184 a kg on buyer resistance. The Board's rate fell to Rs 180 from Rs 183 a kg for RSS 4. The September futures weakened to Rs 171.30 (172.27), while the October futures improved to Rs 165.51 (165.38), November to Rs 164.50 (163.74) and December to Rs 166 (165.22) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE).

The volumes were 6,238 lots. The total open interest in all series was 3,795 lots and turnover Rs 106.33 crore. The Tokyo rubber futures firmed up catalysed by the Yen's fall against the dollar and a retreat in oil prices. RSS 3 improved at its August futures to ¥ 334.3/Rs 181.17 ( ¥330) a kg during the day session and to ¥334.9 (Rs 181.49) during the night session on the Tokyo Commodity Exchange (TOCOM).

RSS 3 (spot) increased to Rs 155.67 (Rs 154.78) a kg at Bangkok. The spot rubber rates per kg were: RSS-4 Rs 180 (184); RSS-5 Rs 170 (174); Ungraded Rs 160 (164); ISNR 20 Rs 154 (156) and Latex 60% Rs 114 (114).



Rubber price rise hits non-tyre sector
Posted: 18 Aug 2010 03:56 PM PDT
Kochi: Non-tyre rubber industry, which mostly produces footwear, conveyor belts, hoses and tubes, is facing a serious crisis due to steep rise in prices of natural rubber.

More than 200 firms producing rubber-based products have shut shop last year due to higher input price of rubber and the inverted duty structure, which favours import of finished products, TK Mukherjee, president, All India Rubber Industries Association (AIRIA), said.

Non-tyre rubber industries consume 60% of the natural rubber produced in the country with automotive tyre manufacturers consuming the rest.

Demand for natural rubber over strips supply by almost 2 lakh tonne per annum and imports are necessary to keep the industry running, he said.

Local rubber prices have nearly doubled in the past year on a drop in output due to drought coupled with rising demand from tyremakers. RSS 4 prices touched Rs 186 per kg last week in the Kottayam market while the comparable international price hovered around Rs 150 per kg.

Tyre manufactures and non-tyre industries have been asking the government to allow duty free imports of 2 lakh tonne of natural rubber to cool the domestic market.

“But the inverted duty structure, where rubber imports are taxed 20% while finished rubber products are taxed less than 10% works against the interest of the domestic industry. It is cheaper to import finished products,” he said.

Demand for products like transmission belts, conveyor belts, hoses, tubes, cables and wires are increasing rapidly with good growth in the mining and infrastructure industry. “But importing a conveyor belt from China works out to be cheaper than buying one from India,” he added.

Domestic tyre manufactures are also claiming large-scale imports of Chinese tyre into India due to the current duty structure.

(financialexpress.com)