Rubber weakens on global trend

Rubber weakens on global trend

Kottayam, Sept 15

Spot rubber turned weak on Wednesday. The market opened steady but lost ground towards closing hours on buyer resistance.

According to sources, there has been no selling pressure in the market as the inflow was still weak. Traders lost confidence following the sharp decline in the Japanese futures and a partially weak closing on the National Multi-Commodity Exchange (NMCE). The trend was mixed.

Sheet rubber moved down to Rs 168 from Rs 169 a kg, according to dealers.

The grade was quoted steady at Rs 168.5 a kg on the Rubber Board's official Web site.

In futures, the September series closed at Rs 169.94 (170.02), October at Rs 167.6 (167.35), November at Rs 167.3 (167.3) and December at Rs 168.04 (168.42) a kg for RSS 4 on NMCE. The volumes totalled 2,214 lots and open interest 3,608 lots. The turnover was Rs 37.17 crore. RSS 3 September futures declined to ¥ 298 (Rs.162.01) from ¥303.4 a kg during the day session and then to ¥ 292.4 (Rs.158.97) during the night session on the Tokyo Commodity Exchange . RSS 3 (spot) improved marginally to Rs 162.85 (162.36) a kg at Bangkok.

The spot rubber rates were (Rs/kg): RSS-4: 168 (169) RSS-5: 165 (165) Ungraded: 160 (161) ISNR 20: 155 (155) and Latex 60 per cent: 115 (115)



Import duty hike on finished tyre sought

Staff Reporter
This will offset inverted duty structure: board

KOTTAYAM: It has been the considered view of the Rubber Board that the import duty on finished tyre should be enhanced to offset the inverted duty structure in the sector, according to Sajen Peter, Chairman, Rubber Board.

Speaking to The Hindu on the reported move of the Union Commerce Ministry to rationalise the import duty disproportion between natural rubber and manufactured tyre, Mr. Peter said the board had discussed the matter and submitted its recommendation to the Centre.

The issue refers to the contention of tyre manufacturers that while import of finished tyre attracts duty of only 10 per cent, the import duty on natural rubber was 20 per cent. In fact, the tyre import from China and Korea attract a duty of 8.6 per cent. This had created an ‘inverted duty structure' where the duty on the raw material was higher than the duty on finished product.

The manufacturers argued that the inverted duty structure would erode competitiveness of the industry.

Mr. Peter on Wednesday said that the board had always pointed to the authorities that while the contention was relevant in the normal situation, the one that prevailed in the natural rubber sector was different.

“Natural rubber might be an industrial raw material for the manufacturers but it is an agriculture product from the point of view of lakhs of growers. We have a situation where other cash crops like pepper, tea and coffee attract 100 per cent duty while cardamom attracts 75 per cent import duty. The grower will not be able to digest the view taken by the manufacturing industry,” he said.

Contesting the claims made for import of finished tyre at highly competitive rates, Mr Peter said if encouraged, import of finished tyres would affect the domestic tyre manufacturing industry. Moreover, a study found that the natural rubber component in the tyre imported last year had accounted for 35,000 mt of natural rubber.

In other words, the import of finished tyre was impacting not only the tyre manufacturing industry but the internal natural rubber sector also, he said. Mr Peter said the hike in import duty on finished tyre would not in any way affect the provisions of existing regional trade agreements (RTS). It was only last month that the State went through a minor storm when the reports on the part of the Ministry of Commerce to cut the import duty on natural rubber from 20 per cent to 7.5 per cent appeared in the media.



Rubber, real estate fuel development

Staff Reporter
Kottayam: One of the areas that have found a lot of activity in Kottayam during the past one decade is real estate. With the early promoters facing difficulties in the late 1990s, the growth had been chequered in the segment. However, it picked up by middle of the last decade.

“True, the recession had been a dampener, but it brought out the much needed correction in the sector, which was dominated by the unprofessional ‘promoters' who had jumped into the bandwagon for the quick money,” says Mathew Kuruvilla, managing director, Chandy's Homes, which is a subsidiary of the two-decade-old Chandy's Constructions.

According to him, the recession had not impacted the professional promoters who could ensure value for money for their clients and look forward to a steady growth of the sector at least for the next quarter of a century.

According to Sunny George, executive director, Castle Homes, the sector is now dominated by local players who have to ensure quality to reach out to the prospective clients as the brand loyalty was yet to be attained for most of them.

The recession had its impact during 2008 and 2009, as most of the ‘investor' clients kept away from the market. However, the market is picking up with promoters announcing new projects for both flats and villas, he says.

The catalyst

The one single factor that ensured the growth of all the major core sectors appears to the buoyancy that existed in the core economic sector of the district - natural rubber. The NR sector, which witnessed some of the worst days in the 1990s when prices nosedived to the below-Rs.50-a-kg range, rebounded with a vengeance during the past decade. Though the decade started off on a sombre note, the prices galloped during the past few years and reached the dream level when it crossed Rs.180 a kg few months ago.

The boom in the NR sector, dominated by small growers, has created a strong and healthy middle class, resulting in the arrival of a string of major retailers in textiles, jewellery and like.

However, the NR boom has also resulted in the middle class making intelligent investment in real estate, education for their children and availing of more leisure time activities, thereby contributing to the growth of the other sectors. Now, it appears that the district is all set for a take-off, linking itself to the emerging metropolis Kochi through major investments in infrastructure.