Union Budget 2016-17 will be presented on 29th February and industry
expects to see a blueprint that would strengthen the demand scenario and would
be focused on pushing the Indian economy to the targeted GDP growth. Finance
minister Arun Jaitley faces a tough task of balancing the needs of farm sector
as well as the industry when he presents his third Budget. On the tax front,
the Budget may continue with the status quo, while it may tinker with the
exemptions.
While the fortune of the Indian tyre industry is knotted with the
performance of the automotive sector. With economic activity gathering pace and
the RBI ushering in monetary easing, it could boost consumer sentiment. The domestic
production of natural rubber is insufficient to meet the growing demand; import
dependence will remain for quite some time, as the gap is widening. But it
should not be at the cost of hurting domestic business, especially when the
industry is going through a manufacturing slump. Demand for tyres is expected
to accelerate in 2016-17. Industry expects this budget to help boost demand and
keep the industry momentum going.
The Association of Planters of Kerala wanted
amendments in the Plantation Labour Act, which mandates the provision of
housing, sanitation and medical care facilities to workers. While Indian Rubber
Dealers Federation has urged the Centre to enhance the replanting subsidy to `.1
lakh per hectare from the present `.20,000. Growers seek
a temporary ban on imports till a safeguard duty is levied.
Automotive Tyre Manufacturers Association
(ATMA) said the existing curbs on natural rubber import are restricting them
from sourcing the raw material at competitive prices at a time when domestic
output is declining sharply. In view of such steep fall in natural rubber
production, imports are a must to meet the growing demand of tyres from auto
and transport sectors. High import duties on natural rubber and much lower duties
on finished tyres is leading to indiscriminate surge in import and dumping of
tyres in India.
Don’t expect much on Monday.
The benchmark RSS4 grade rubber closed at `.96.50
a kg at Kottayam, while RSS3 grade closed at `.89.42 a kg at
Bangkok and Malaysian SMR20 closed at `.78.03 a kg. On
National Multi Commodity Exchange March 2016, the futures closed at `.98.53
a kg, April at `.101.94 and May 2016 closed at `.103.90
a kg. Tokyo Commodity Exchange March 2016 futures series closed at ¥147.4 a kg,
April at ¥149.5, May 2016 at ¥152.3, June at ¥153.9, July at ¥155.2 and the
contract for delivery in August 2016 closed at ¥155.6 a kg. On Monday, most
probably Tocom futures contract for delivery in August 2016 may trade in
negative range of ¥153 & ¥158 a kg.
For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf
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