Vipin V. Nair

A worker tending to rubber saplings in one of the nurseries in Adimali in Kerala's Idukki district. Rubber saplings are in demand as planters are going for re-plantation in estates covering 2,700 hectares. -- K.K. Mustafah

Kochi , Nov. 3

NATURAL rubber exports may fall by 30 per cent this fiscal to around 50,000 tonnes, bringing to halt the growth in exports of the commodity during the last two years.

During the April-September period of this fiscal, rubber exports plummeted by 34 per cent to 13,243 tonnes from 20,026 tonnes in the same period a year ago, latest statistics by the Rubber Board showed.

"We may just about do 50,000 tonnes of exports this year," said Prof K.K. Abraham, President of the Pala Marketing Co-Operative Society.

In 2003-04, India exported around 70,000 tonnes of rubber.

Exporters blame the lack of clarity on export subsidies for the dip.

The Government is yet to issue a notification on rubber export subsidies for the fiscal, though the Commerce Minister had earlier said the subsidies would indeed continue but at half the last year's rates.

However, exporters say that there is ambiguity over issues such as quantum of exports for which the subsidy would be applicable. The Minister had said that the subsidy would be given only to exports up to 50,000 tonnes.

It is not clear whether this quantity includes some of last year's exports, for which subsidy is pending.

Natural rubber exports shot up in the last couple of years, propelled by the Government's decision to give subsidies of Rs 3.50 to Rs five for a kg for various grades of rubber.

As against a target of one lakh tonnes of exports for the current five-year plan, the country exported 1.20 lakh tonnes in just two years.

The spurt in exports helped domestic prices pick up.

Prof Abraham said without the subsidies the exports would turn unviable as the price difference between Indian and international rubber has narrowed to about Rs five a kg.

Since the consignments from India have to be routed through the ports of Colombo and Singapore for transhipments, the freight costs are higher for the exporter, leading to further pressure on margins.

"The margins are thin (because of this). You need a minimum Rs 6-7 per kg price difference between the international and domestic rates for exports to be viable," he said.

The Rubber Board statistics show that production of rubber in the first half was up at 3.33 lakh tonnes over 3.13 lakh tonnes in the corresponding period of last year.

It is expected that it will grow by seven per cent for the full year to touch 7.62 lakh tonnes.

Consumption was also up in the first half and is projected to rise by 5-6 per cent for the year.

Imports of rubber in the first half was up 35 per cent at 38,808 tonnes.

For the full year, tyre makers are planning to import 60,000 tonnes.

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