The huge volumes of natural rubber imports have failed to push down rubber prices. This would have given a respite to the rubber consumers as prices continue to remain high. India’s rubber imports suddenly started rising and this years’ imports are expected to double to 160,000 tonnes as international prices have remained lower than Indian prices.
However, because of a lean season in Kerala, the biggest rubber producing state, and with crude oil prices moving up, synthetic rubber prices have gone up. Hence, domestic prices of natural rubber have not fallen despite the spurt in imports. Prices were hovering around Rs 102 per kg a couple of weeks ago and it is Rs 96 presently.
As the global market for natural rubber (NR) is more lucrative for the local rubber-based industries, especially to tyre manufacturers, rubber imports are rising sharply. The latest estimates of the Rubber Board revealed that 8,175 tonnes were imported this April. This is almost double the imports of 4,391 tonnes seen during April, 2008. The most significant factor responsible for the doubling of imports is the price. On an average the local price was higher by Rs 20 per kg in April though the difference has shrunk to Rs 12-13 recently. The Indian market is quoting the highest price tag and this caused a shift towards duty-free imports.
During the first four months of the present year (January - April), the total imports were 23,972 tonnes as against 21,959 tonnes during the corresponding period of 2008. From March onwards, imports were on the rise. In March this year, 7,404 tonnes were imported as against 4,278 tonnes during previous March. It was from March onwards that the Indian market had been appreciating, leading to the sharp rise in imports.
According to sources from the tyre industry, imports would rise sharply in May and it might even cross the 15,000-tonne mark. The per kg cost of the imported rubber on the factory floor is Rs 90 per kg at the present international market price while the same cost is Rs 106 when rubber is purchased from local markets. This price advantage will attract more rubber to India.
The average per month import during 2008-09 was 6,660 tonnes. This will double in the present financial year leading to a total annual import of 160,000 tonne. Some 79,927 tonnes were the total imports in 2008-’09.
The local traders expect some relief from this situation by June when monsoons begin and production would be more active. The present global market scenario definitely indicates a much more vibrant import of NR in the coming months.
Meanwhile, the setback on export was pathetic in April. As per estimates, only 653 tonnes were exported this April as against 3,690 tonnes during the previous April.
Source : Business Standard