Rubber growers are hopeful that the proposed
20% import duty hike on natural rubber is likely to cap cheaper arrival of
rubber. Growers were depressed about the persisting negative trend in natural
rubber prices even as tyre companies continue with aggressive imports.
According to rubber growers, they are unable
to manage rubber production costs. Many plantations have remained untapped due
to significant fall in natural rubber prices followed by severe labour shortage
and higher wages. The growers want the government to take necessary steps to
reduce the burden on farmers by hiking import duty, so as to cap cheaper arrival
of imports. The proposed new import duty formula on natural rubber will be 20%
of the domestic price until the price reaches `.171 a kg, at which
point the duty will be capped at `.34.
With the onset of lean season, tyre industry
has started feeling the pinch of tight availability of rubber. In a letter to
the Rubber Board chairperson, Automotive Tyre Manufacturers Association has urged
the Board to urgently intervene to resolve supply crunch in domestic natural
rubber market. The limited quantities which are available with the dealers are
not being supplemented by new arrivals and what is adding to the supply crunch
situation is the fact that domestic prices have started rising and have once
again overshot the international prices. The price trend is on the rise and
growers are holding back the commodity in the hope of fetching higher prices.
Today, On the Tokyo Commodity Exchange, March
futures series closed at ¥265.4 a kg, April at ¥268.9, May at ¥273.5, June at ¥275.6,
July at ¥278.9 and the contract for delivery in August closed at ¥281.7 a kg. In
the domestic futures market, the April 2013 series is currently trading at `.167.25
a kg, May at `.170.20, June at `.171.94, and July at `.172.68
a kg on the National Multi Commodity Exchange. In the local market RSS4 grade
rubber closed with a positive note at `.164.50 a kg and the
price of RSS3 grade closed at `.161.77 per kg at
Bangkok. While Malaysian SMR 20, closed at `.151.06 a kg.
Read
lot more in Rubber4U – 1st April 2013 issue
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