Rubber4U

1st August 2011 issue

Hike in interest rate may impact rubber

The hike in interest rates will impact the auto sector. The interest rate on automobile loans is expected move up, resulting in weak demand for the vehicles. The sluggish growth in auto sales will impact tyre industry, which accounts for 65% of natural rubber demand. The natural rubber production season is expected to begin from mid August and Kerala accounts for 90% of the natural rubber production and the growers, who are already under fears of an imminent price fall owing to the government decision, may suffer further damage. But some dealers are of view that the prices may not see any decline immediately as producers would have to hold back stocks to limit any sharp fall.

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Rubber4U Anniversary Issue

15th July 2011

Safeguard duty on key chemical

Rubber industry will take a hit as the government deciding to impose safeguard duties on a key chemical (PX-13), aimed at protecting the domestic industry against a surge in imports causing losses. As per a notification, the duties will be levied at 30% of the imported value in the first year and 25% in the second year.

In a complaint filed by NOCIL to the Director General of Safeguards, stated that given the surge in imports, the domestic industry may not find market for additional capacities that are coming up. The user industry, which includes major tyre manufacturers, would now have to pay a higher import duty on the chemical. ATMA is apprehensive that the duty may affect input prices in the future.

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Rubber Board conducting survey

Rubber Board of India is conducting a statistical sample survey of rubber holdings in Kerala. The survey is meant to assess the age of plantations, production and stock of rubber, maintenance of plantations, growers’ response to the board’s schemes and the activities of Rubber Producers’ Societies.

Rubber Board chairperson - Sheela Thomas has requested farmers to co-operate with the survey and also to give correct statistical data, considering its importance in the future planning and formulation of the schemes.

The aim of the survey is to update the statistics and to collect inputs for the formulation of 12th Five Year Plan proposals of the Rubber Board.

The survey is targeting about ten thousand holdings in different regions of Kerala.

Read lot more in Rubber4U – 1st August 2011 issue

Rubber Forecast

Rubber Forecast 2011-12

40,000 tonnes of NR import allowed at 7.5% duty

Indian government has permitted imports of 40,000 tonnes of natural rubber at a concessional duty of 7.5% for the current fiscal. This is in line with the one allowed last fiscal. The move to allow imports at a lower duty follows demand from the user industry, to allow import of two lakh tonnes duty-free.

The import will meet consumers' need for just 15 days, going by the consumption of 80,500 tonnes in June. Growers, however, are totally opposed to imports, as it may suppress domestic prices.

Since 1^st April 2011, the Customs duty on natural rubber has been fixed at 20% or Rs.20 a kg, whichever is lower. In the first quarter of the current fiscal, NR imports doubled to 38,233 tonnes from 19,118 tonnes during the same period of previous fiscal.

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India to head IRSG for 2 years

India has been elected as the new Chairman of the International Rubber Study Group. Mrs. Sheela Thomas, Chairperson of the Indian Rubber Board, will officiate as the Chairman of International Rubber Study Group (IRSG), for the next two years. The decision was made unanimously in the meeting of the Heads of Delegations (HOD) held on 14th July 2011 at Singapore. EU was elected as the new Vice Chairman for the next two years. Members opined that India, being both a producer and a consumer of rubber, would be in a good position to protect the interests of both producers and consumers in IRSG.

While presiding over the meeting of the HOD, the new Chairman of IRSG, Mrs. Sheela Thomas, highlighted the need for increasing the coordination among ANRPC, IRSG and IRRDB. There should not be duplication of work among the organisations and the synergy of expertise of the three organisations would be appropriately utilised for the benefit of rubber industry.

Read lot more in Rubber4U – 1st August 2011 issue