Rubber exporters lose out to commerce ministry in court September 25, 2011

Rubber exporters lose out to commerce ministry in court
September 25, 2011





KOCHI: The Union ministry of commerce and industry had a spectacular win in a legal tussle with rubber exporters of Kerala this week, resulting in saving customs duty to the tune of Rs 20 crore.

As many as 25 business groups engaged in exporting rubber mats were defeated by the ministry at the Kerala High Court, when the court ruled in favour of the ministry, accepting the director general of foreign trade’s contention that the products being manufactured and exported by the groups are not entitled for duty exemption allowed for rubber compounded sheets.

The ruling in favour of the ministry was granted by Justice J Chelameswar and Justice P R Ramachandra Menon against 25 business groups, including Fibre World, Kanti Floor Furnishers, Popally Coir Mills, and K S Gangadhara Iyer and Co. as well as rubber product exporters N V Georgekutty, K S Shaji, and Sadath Lebba.

The exporters were availing of duty discount meant for neutralizing the incidence of basic Customs duty on the import content of export products through Duty Entitlement Pass Book(DEPB) tax refund scheme of the central government. Each of the exporters had claimed for duty benefit of around Rs 2 crore each.

In 2006, a single bench of the high court had allowed three petitions by exporters challenging the discontinuance of the tax benefit that was being availed of by them since the inception of DEPB in 1997.

The ministry moved an appeal before the Chief Justice against the earlier high court order stating that the products being claimed for tax credit are not rubber compounded sheets but value-added products made through vulcanization and moulding.

Ministry’s counsel John Varghese pointed out that extending tax credit meant for rubber compounded sheets to value-added products results in a burden on the exchequer. The total tax credit being availed of like this amounts to Rs 20 crore, Varghese said. The court accepted his argument and allowed all the appeals filed by the ministry, quashing the earlier single bench verdict in favour of the exporters.

Source: http://timesofindia.indiatimes.com/city/kochi/Rubber-exporters-lose-out-to-commerce-ministry-in-court/articleshow/10109469.cms





The risk of global recession spread to the rubber industry
Written by HMH | September 24, 2011 | 0 |





Sept 23, 2011, the period of the rubber a contract early January fell 3.88% . The Fed warned that downside risks facing the global economy, Europe, and China’s manufacturing industry continues to decline, the market will be a heavy blow to confidence. Meanwhile, the rubber into the procurement season and increased rainfall seasonality, have been ignored by the market.

Asian stock markets, the previous trading day, prices fell.An exporter in southern Thailand, said there are many sellers, if you buy more than 500 tons, it will not provide, or because the price will rise. 10 months / 11 months shipment of Thailand3 , No. Yan Pianjiao RSS3 per kg 458 cents. 23 days, the Malaysian standard plastic SMR20 10 months FOB official offer morning fell.

22 , the New York Mercantile Exchange 10 -month crude oil contract fell 5.41 cents, or 6.3 percent , to settle at a barrel80.51 U.S. dollars. Eurozone business activity contraction, ending two consecutive years of growth situation. 9 months eurozone composite purchasing managers index (PMI) from the initial 8 months of 50.7 down to 49.2 , may exacerbate concerns surrounding the eurozone economy. Italian government bonds risk premium on German government bonds rose to a high since the inception of the euro, the continued focus on the debt situation of Greece and the tension concerns the global economic slowdown against the risk asset composition. The U.S. Federal Reserve warned the already weak economy a huge downside risk, dampen market confidence. Crude oil fell, to cut the cost of synthetic rubber, the rubber market disadvantage.

Overall, commodity markets remain under considerable pressure. Data show that European manufacturing began to shrink, and stop nearly two years of recovery situation. Meanwhile, Italy’s debt situation is deteriorating, European Central Bank’s intervention may be because the convergence of Germany’s opposition. Assistance might be close to Greece, but it does not change its position close to bankruptcy. The Fed announced that the U.S. economy faces serious risks, China’s manufacturing data may suggest a drop in demand. Adverse external situation of the rubber market. Although the rubber market into the shopping season, but not large-scale traders admission, spot prices continue to decline, the hoarding of goods does not seem a wise choice. Chinese stocks are low, and rainfall in Thailand are not significantly boost the market, because the demand outlook has become increasingly bleak. Market concerns about a recession is inevitable. By then, a large number of surplus production will tire and rubber raw materials to the oversupply.






Rubber Board sees 75,000-tonne supply shortfall this year
Written by HMH | September 24, 2011 | 0 |





CHENNAI, SEPT. 24:
The Rubber Board is projecting a 75,000-tonne shortfall in availability of natural rubber this year.

Addressing media persons at the 59{+t}{+h} Annual General Meeting of the All-India Rubber Industries Association, Ms Sheela Thomas, the board’s Chairperson, said that rubber production is set to increase to 9.02 lakh tonnes (lt), representing a 4.6 per cent growth over last year. The rubber products industry will need over 9.77 lt that is well over the anticipated supplies.

Over the next decade and a half, the Rubber Board expects the shortfall to grow to over 1.80 lt with production in 2025 expected to touch 1.63 million tonnes against a demand of 1.81 million tonnes of natural rubber.

Expanding the plantation of natural rubber to new areas, particularly the North-East and other pockets in the South including parts of Tamil Nadu, is an option, she said. Between 2005 and 2011 the area under production has trebled to about 1.54 lakh hectares compared with 1998-2004 when it was around 53,730 ha.

The industry believes the estimates of shortfall by the board are conservative, and the board had launched a separate survey to assess the natural rubber stocks. The findings of the sample survey is expected to be out in October, she said.

Mr Vinod T. Simon, President, All-India Rubber Industries Association, said securing the natural rubber is the single largest concern for the industry. While long term initiatives could include expanding plantation areas, the Government needs to be supportive on short term measures like facilitating imports.

The prevailing import duties need to be brought down as costs are increasing and the shortfall cannot be bridged at current rates.

SPOT RUBBER RULES WEAK

Our Correspondent reports from Kottayam: Spot rubber finished weak on Saturday. The weekend session was comparatively dull while the market lost ground on buyer resistance.

In futures, the October series recovered marginally to Rs 211.85 (210.50), November to Rs 209.35 (208.01) and December to Rs 210.06 (208.66 a kg for RSS 4 on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 214 (214.50); RSS-5: 208 (208); ungraded: 199 (200); ISNR 20: 209 (209) and latex 60 per cent 134 (134).

Source: http://www.thehindubusinessline.com/markets/commodities/article2482392.ece