India’s rubber industries seek lower import duty on latex

Tuesday, 22 March 2011 00:01 -     - {{hitsCtrl.values.hits}}

Kochi: In the backdrop of the recent surge and wane in natural rubber prices, the All India Rubber Industries Association (AIRIA) has asked for the immediate correction in the inverted duty structure in rubber latex, on the lines of natural rubber that was effected recently.

The import duty on latex stands at a significant 70 per cent, even as that on the finished product is less than 7.5 per cent, AIRIA said.

While growth in natural rubber production has been modest, huge capacity build up is being undertaken by the tyre industry, which could increase the demand for natural rubber in the immediate future. According to the Rubber Board, the cumulative production of natural rubber in the country grew by three percent to 8, 04,450 tonnes during April-February period. Consumption, meanwhile, grew by 1.9 per cent to 8, 68,230 tonnes.

The growing demand and prices has prompted AIRIA to write to the Finance Ministry pointing out that the increase in price of latex is threatening the very survival of the industry which comprises mainly of small units. Latex is largely consumed in the country in the production of foam mattresses, medical and surgical articles including gloves, balloons, hot water bottles and some sports goods.

Along with the price of rubber sheet, latex prices have also surged from around Rs. 55 a kg in January 2009 to Rs. 117 at present, after having peaked to Rs. 148. It is surprising that the import duty on latex has been gradually enhanced from 25 per cent in 1999-2000 to 70 per cent recently, while that on finished goods has been reduced from 40 per cent to less than 7.5 per cent during the same period, Vinod Simon, President of AIRIA said.

“The facilitated import of finished goods is antithetical to the Government’s avowed policy of enhancing domestic value addition,” he added. A large number of the small and medium scale units are not able to pass the price hike to the consumers.

India Feb natural rubber output, consumption up

Reuters) – India’s natural rubber production in February rose by 5.8 percent on year to 54,500 tonnes, the state-run Rubber Board said in a statement, as farmers increased tapping to cash in on a price rally.

The south Asian country’s production during April-Feb stood at 804,450 tonnes, up 3 percent on year, it said.

“Because of unseasonal rains in February many farmers continued tapping. Prices were also high,” George Valy, president of The Indian Rubber Dealers Federation (IRDF), told Reuters.

“Even in March, we will see impact of unseasonal rains. Production number in March is likely to be higher than last year’s,” Valy said.

The world’s fourth biggest producer’s consumption rose by 3.5 percent to 79,000 tonnes in February from 76,350 tonnes in the year-ago period, the board said.

Imports in February nearly halved to 6,831 tonnes.