Tyre and non-tyre rubber consuming industry associations have harnessed the newly released import data from the Rubber Board to counter the charge that increase in import of natural rubber (NR) was the main culprit behind the collapse of domestic price of RSS-4 grade. The prices fell only because, internationally, the commodity had met a market crash, they claimed.
Growers of NR have been blaming the flood of NR imports as the prime reason for the steep fall in domestic prices of rubber sheets. The Rubber Board, in its role as a production promotion agency, had conveyed the growers' concerns to the Centre.
Early this week, the Rubber Board released data which said that in April-December of 2013-14, NR imports increased by 91,135 tonne, to a total of 2,64,576 tonne. This was against the 1,73,441 tonne brought in during the same period of 2012-13. On the other hand, the decline in domestic NR production in the same period was 70,200 tonne, leaving a net excess of only 21,843 tonne.
The key industrial outfits, AIRIA (All India Rubber Industries Association) and ATMA ( Automotive Tyre Manufacturers Association), were quick to seize to their advantage the revelation of figures on the relative lesser increase in NR imports (compared to the same period in the previous year). "The release of data by the Rubber Board only justifies the industry view that the drop in domestic NR prices has nothing to do with increase in imports. Over a total production of 6,27,000 tonne in the April-December period, the excess availability of just about 2,10,000 tonne is too insignificant to dent prices. This is not justifiable to warrant increase in import duty," said Niraj Thakkar, president, AIRIA.
The industry believes blaming imports was more a matter of perception than fact. Rajiv Budhraja, director general, ATMA, opines that a view was formed that there had been a steep surge in NR imports. It was this perception that caused the government to increase import duty by 50%. The industry reiterates the drop in NR production has been steeper than what the Board stated. "Now, the data released by the Board has shown a drastic cut in domestic output too. This fact was not considered in the high-pitched debate on imports. As a result, the industry will continue to suffer from inverted duty structure which has recently got worse," Budhraja said.