Date:22/06/2006 URL: http://www.thehindu.com/2006/06/22/stories/2006062203561800.htm

Business

Tyre industry's demand meant to confuse people, say rubber dealers

Staff Reporter

KOCHI: The Indian Rubber Dealers' Federation has said that the call by the tyre industry to cut the import duty on rubber from 20 to 10 per cent was meant to confuse people at a time when rubber growers had begun to get "reasonable prices which will enable them to pay off their accumulated debts."

President of the federation George Vally said here that growers had received low prices during the 1999-2002 period when the country had over two lakh tonnes in rubber stocks.

Various measures announced by the Government to bring succour to the rubber growers did not materialise as the tyre industry kept importing rubber "for reasons known to them."

Mr. Vally said that even the statutory minimum price announced by the Union Government had failed to bring any relief to the rubber growers then. Efforts by agencies such as Rubbermark, Rubco and Infam, along with the steps taken by the Government to offer incentives for export, led to the gradual depletion of the rubber stocks.

Although the country exported 2,46,832 tonnes of rubber during the 2002-06 period, the tyre industry imported 1,82,773 tonnes during the period.

Thanks to the upswing in the international market, the price of rubber has gone up over the past one year, said Mr. Vally adding that the tyre industry procured rubber at lower prices from growers resulting in a total loss to the growers of Rs.600 crores. The tyre industry was not importing rubber now even against the advance licence scheme because of high international prices and the availability of rubber in Kerala.

The production of rubber has been at a high since the monsoon has been delayed and the demand from the tyre industry to ban exports does not hold good, said Mr. Vally.