Tuesday, November 1, 2011

Proposed tax hike may impact the industry

Natural rubber prices in the international and domestic market continued to decline as uncertain global macro economic conditions raised concerns over the demand. Compared to the international market, losses in the Indian markets were limited probably due to weakening rupee which is limiting imports.

India Government is likely to impose additional tax diesel cars which may affect the country’s automobile and natural rubber industries adversely. If the proposed tax comes into effect, the passenger car sales may show lower growth rate, which in turn may affect rubber industries. Demand for the finished product and in turn for raw material may decrease. Decision for increasing the tax is to raise the much needed revenue for the country. All efforts are being made to ensure the fiscal deficit target of 4.6% of GDP is met. The Finance Minister is expected to take the decision after assessing the indirect tax collection figures for October 2011.

The latest price of RSS3 grade natural rubber in the international market at Bangkok closed at Rs 194.82 per kg., SMR-20 closed at 186.77 a kg at Kuala Lumpur and on the other hand domestic RSS4 grade closed at Rs. 211.50 a kg at Kottayam. At Tokyo Commodity Exchange futures prices for November delivery closed at ¥291.4 a kg and ¥296.4 a kg for March 2012 contract.

Weak sentiments exist in the market, a pull back towards Rs. 215 per kg in the domestic market had been seen and once again a fall to Rs. 198 per kg may be possible in near future.


Read lot more in Rubber4U – 15th November 2011 issue

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