Growers and users are pitted against each other over the import of natural rubber as prices continued to slide after rain-interrupted tapping resumed early in September.

Natural rubber closed at Rs. 166.50 a kg in Kottayam on Thursday, continuing its slide from Rs. 168.50 a kg on October 1. The average natural rubber price in October 2012 was Rs. 191.96 a kg for Ribbed Smoked Sheets of grade 4 (RSS4).

In September the price ranged between Rs. 185.50 a kg as the month opened and Rs. 171 a kg on the month’s last trading day. The price had peaked to Rs. 187.50 a kg on September 11.

Indian Rubber Growers’ Association has expressed fears that rubber import into the country may go up to about three lakh tonnes after the Rubber Board released figures which put imports during the first six months of the current financial year at 1.79 lakh tonnes.

A representation by the Association early this week appealed to Union Commerce Ministry to suspend duty-free import of rubber and to increase duty on import to Rs. 34 for six months.

The Association’s Siby Monippilly argued strongly for action to prevent more imports of rubber. He listed several reasons why the government should act on behalf of the growers.

The rubber user industry has, on the other hand, opposed any move to hike duty. “Any hike in natural rubber duty will throttle the growth of NR-consuming industry (tyre and non-tyre) in India, which is already passing through a difficult phase due to a slowdown in the automobile sector,” said Rajiv Budhraja, director general of the Automotive Tyre Manufacturers’ Association (ATMA), in an emailed message from Delhi.

He claimed that any hike in duty on natural rubber would be unjustified on the grounds that there was a shortfall between domestic consumption and availability, “making imports imperative”. Mr. Budhraja claimed that the domestic rubber prices were ruling much higher than the international prices. The prices he quoted were Rs. 167 a kg in the domestic market against the international RSS3 price of Rs 157 a kg.

A leading rubber trader said there was too much volatility in the market as was seen from the futures market. The October counter of NMC saw futures price fall by more than Rs. 7 a kg this week from Rs. 172 to Rs. 164.50.

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