Rubber Board sees India FY13 imports topping estimates
--Rubber Board head: FY13 rubber imports seen over 200,000 tn
--Initially pegged FY13 rubber imports at 160,000 tn
--India FY12 rubber imports were at 217,000 tn
--FY13 rubber export seen below 40,000 tn estimate
--Exports down due to weak global prices
--FY13 rubber output estimate cut to 930,000 tn
--FY13 rubber output earlier pegged 942,000 tn
--FY13 rubber consumption seen 1.06 mln tn
--FY13 rubber supplies adequate to meet demand
--FY13 end rubber stocks seen up at 270,000 tn
--Aiming 24,000 ha more area under rubber FY13
--Aim 23,000 ha more area under rubber in FY14
--750,000 ha under rubber plantation in FY12
India's natural rubber imports in the current financial year ending March are likely to top the Rubber Board's estimates, but may still fall marginally short of last year's level. The country is likely to import over 200,000 tn natural rubber in 2012-13 (Apr-Mar), compared with 217,000 tn a year ago, Rubber Board Chairman Sheela Thomas said. "(Our) import projection was 160,000 tn (for the current financial year). But the present trend shows that it would be higher than this estimate... It is possible that our imports may cross 200,000 tn this year," Thomas told NewsWire18 in a telephonic interview. According to latest Rubber Board data, India imported 22,748 tn rubber in November, as against 16,125 tn a year ago. During Apr-Nov, the commodity's imports had risen over 32% on year to 153,855 tn. Asked whether rubber imports are likely to top last year's 217,000 tn, Thomas said, "Last year, it was 217,000 tn. I can't say (whether) it would cross last year's level, but largely it would be line with last year." Asked for the reason behind rubber imports topping expectations, she said: "(Around) 50% of imports are under advance licences, and for the rest they (importers) have to pay duty. We are not able to understand why they are resorting to (imports). They should buy from domestic market." Industry experts and tyre companies say it is cheaper to import rubber rather than procuring it from the domestic markets, as global rates are lower. Thomas said so far in the current financial year, domestic prices have averaged around 185 rupees a kg compared with an average of 178 rupees in the global markets. Thomas said global rubber prices have been weak for most of the year due to the global economic slowdown, which has led to shrinking demand. India's natural rubber exports were around 58% lower on year during Apr-Nov at 9,179 tn. "We have been projecting export of 50,000 tn for last few years, but we have not touched that so far. So we had reduced that target to 40,000 tn for this year. We might not reach that (target also)," Thomas said. She said exports are not lucrative because of weak global prices. India, the fourth largest rubber producer in the world, typically exports rubber to Europe, Japan, Malaysia, Turkey and the US. Iran is also a very good market for Indian rubber exports but because of the payment issue, sales have not been very robust to the West Asian country, Thomas said. Iran is also a very good market for Indian rubber exports but sales here have not been very robust due to issues in payment, she said. These issues have cropped up following western countries' sanctions on the West Asian nation over its nuclear programme.
OUTPUT, CONSUMPTION
India's natural rubber output is now seen declining to 930,000 tn in the current financial year due to a fall in production over the past few months, Thomas said. "(Output) Projection is 930,000 tn for the current financial year. At the beginning of this year, we had projected 942,000 tn, but there was a dip in production for few months. Therefore, we have revised the production estimates," she explained. India's natural rubber production in 2011-12 had risen 4.3% on year to 899,400 tn. The fall in production notwithstanding, there would be enough supplies in the country to meet the projected consumption of 1.06 mln tn, Thomas said. "Though, consumption is higher than production, we would have lot of stocks and imports. We started the year (April) with a stock of 230,000 tn. We would end this year (March) with a stock of 270,000 tn because of more (higher) imports," she said. In 2011-12 (Apr-Mar), the country's rubber consumption had risen nearly 2% on year to 966,215 tn.
PLANTATION PUSH
Thomas said the Rubber Board has taken up planting activities in a major way and is eyeing plantations in non-traditional areas. "We are trying to expand rubber production in the northeast, parts of West Bengal, Odisha, Andhra Pradesh, Maharashtra and Karnataka. Target for this year 23,000 ha for new planting and 10,000 ha for replanting," she said. Thomas said there has been a lot of rubber planting post-2002, so most of the trees are young. "So we don't have to worry about the recovery and yield. This year also there will be considerable replanting of rubber plants and it gets rejuvenated. Therefore, condition of plants is not a matter of concern as of now," she said. She said, the total area under rubber plantation in 2011-12 was 750,000 ha and the Board has targeted an additional 24,000 ha of new plantation and 17,000 ha under re-planting in the current financial year. The life span of a rubber tree in a plantation is 32-35 years, of which about 25 years constitute the productive phase. "Projection for 2013-14 replanting is 15,000 ha, and new planting is 23,000 ha. The projection for 2013-14 is less due to sufficient old plantings," Thomas said.
(Source: NewsWire18)
Rubber industry demands cut in raw materials duty
Kochi Dec 27, 2012, 00:19 IST: The rubber industry has sought lower import duty on raw materials such as butyl rubber and hi-tech synthetic rubbers, while it wants the duty on finished products to be kept high. A pre-Budget plea by the All India Rubber Industries Association (AIRIA), has asked for reduction in customs duty on natural rubber (NR) from the current 20 per cent or Rs 20 a kg to 7.5 per cent or Rs 10 a kg, whichever is lower. NR is the major raw material for Indian rubber industries, accounting for 35-45 per cent of raw material cost.
At the current international price of Rs 160 a kg of NR, the import duty of Rs 20 works out to around 12.5 per cent, much higher than the import duty on finished rubber products at 10 per cent, leading to an inverted duty structure.
China has just reduced the import duty on NR from a maximum of 1,600 yuan currently to a maximum of 1,200 yuan effective January. At the current international price of around 25,000 yuan tonne, the import duty comes to just about five per cent. The Indian industry needs a level playing field to be competitive, said Niraj Thakkar, president of AIRIA.
In view of the high rate of import duty, ranging from 20-70 per cent, on most raw materials, the cost of finished goods made from such imported raw materials is higher than the landed cost of such imported finished goods. This leads to imports of finished goods from neighbouring countries, causing injury to domestic producers, Thakkar added.
AIRIA estimates the demand-supply gap in NR at over 150,000 tonnes in the next ffinancial year. The industry body has sought permission for duty-free import of 100,000 tonnes to bridge this gap. It has also asked for allowing NR import under the Asean free trade agreement on reduced customs duty, in line with the concessional tariff on finished products. This is a pre-condition for providing a level-playing field for local rubber-based units.
There are more than 6,000 units in India, most of which are facing a crisis situation due to increase in raw material cost and import of cheap products from countries such as China.
The surge in cheap imported rubber products from China and other countries is an area of concern for the Indian rubber industry. With over 35,000 rubber products, it is difficult to prove the dumping charges and most of the manufacturers being small, they do not have the resources to initiate anti-dumping proceedings in accordance with the law.
On the other hand, levy of anti-dumping duties on carbon black and rubber chemicals, major raw materials for the industry, has made Indian rubber products expensive, compared to imported finished products.
AIRIA said the import of even raw materials is subjected to high rate of customs duty, making it difficult for the industry to survive and to compete against import of finished products. Therefore, AIRIA has asked for waiver of customs duty on raw materials not manufactured domestically such as butyl rubber and other hi-tech synthetic rubbers.
The industry body has also asked for reduction of customs duty on raw materials where domestic production lags consumption, like raw materials such as poly buetadine rubber, nylon tyre cord fabric and steel tyre cord, among others.
Import duty on latex continues to be a staggering 70 per cent and has been only recently capped at Rs 49 per kg. However, latex being a wet form of NR, the duties should be comparable to natural rubber.
The high customs duty structure on raw materials has gravely affected the industry and in many cases, it has led to lower capacity utilisation or even closure of units manufacturing rubber products.
According to available reports, as many as 294 units manufacturing rubber products have shut shops over the past five years. Moreover, the number of rubber product manufacturers who have shut down production is the highest in the category that consume lower quantity of rubber (less than 100 tonnes).
(Source: Business Standard)
Tyre industry against import curbs on rubber
Kochi, Dec. 23: The tyre industry has opposed imposing import curbs on rubber, saying that it will be counter productive.
The import curbs will have far reaching adverse consequences for the industry already facing the onslaught of unprecedented slowdown in the automobile sector.
The Automotive Tyre Manufacturers Association (ATMA) said in a statement that the demand raised by rubber growers also does not corroborate with the facts.
High domestic prices
An analysis of domestic (RSS 4) and international (RSS 3) prices shows that domestic prices have ruled higher than international prices over the last six months except in December.
Even when compared with Malaysian SMR 20, which is a competing grade of rubber with RSS 4, domestic rubber prices are still ruling higher.
The consumers have been at the receiving end of comparatively higher domestic prices for a major part of the year.
Any knee jerk reaction could have disastrous consequences for the tyre industry which is already facing the prospects of low tyre demand in view of de-growth in automobile production, Rajiv Budhraja, Director-General, ATMA, said.
According to him, the domestic prices have ruled higher due to domestic demand outstripping availability making imports imperative.
Volatile futures
ATMA has put the blame on volatility in rubber prices on futures trading. The futures in December have dropped from Rs 167 to Rs 158 a kg within a week, while international prices have risen from Rs 170 to Rs 173.
The Association also suggested market intervention, through Rubber Board or any other designated agency such as STC, till prices are perceived to be in the vicinity of international prices.
(Source: The Hindu BusinessLine)
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