Thiruvananthapuram: Worried over natural rubber price jumping to Rs 155 a kg, industry outfit the Automotive Tyre manufacturers Association has sought the intervention of Prime Minister Manmohan Singh to ease natural rubber availability in the country. In a memorandum to Prime Minister, ATMA has sought zero-duty rubber imports and ban on futures trading.
In the note, ATMA chairman Neeraj Kumar said the price rise in natural rubber is likely to fuel inflationary trend in transport sector.
Even during peak natural rubber production season (Oct ’09-Feb ’10), domestic rubber prices remained steep and market reports indicate prices could reach Rs 175-180 per kg in the near future. ATMA has asked for permission for duty free import of at least 200,000 million tonne of natural rubber on a priority basis.
Tyre companies not in a position to import rubber, due to the prevailing inverted duty structure since customs duty on natural rubber imports is 20% whereas the import duty on finished product (tyre) is at 8.6% tariff. However, under the Asia Pacific Trade Agreement basic customs duty on tyres is 10%.
Reiterating, its earlier demand of slashing import duty on natural rubber from 20% to 7.5%, ATMA said China has already taken immediate steps by abolishing the customs duty on compound rubber imports and reduction of duty on rubber imports.
Kumar also argued that future trading in rubber fuels speculation. According to an estimate by the Rubber Board, natural rubber consumption in the current financial year is far in excess of production and the gap will widen in the next fiscal.
(financialexpress.com)
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