UPASI & Rubber Industry reject each other’s claims on Natural Rubber Imports
The rubber & tyre industries have contested the argument that imports of Natural Rubber in India were much higher than domestic production deficit leading to distress in the rubber sector, as alleged by United Planters Association of Southern India (UPASI) recently.Quoting Rubber Board data, the industry has pointed out that against Natural Rubber production-consumption gap of 2.55 lakh tonne in the April-October period of the current financial year, 2.52 lakh tonne of Natural Rubber has been imported.
Previously The United Planters’ Association of South India (UPASI) had called upon the Government to play its role as a regulator & introduce necessary safeguards to limit rubber imports.UPASI said that it understands the need for imports to bridge the gap between consumption and production, but unbridled imports beyond this gap are clearly causing harm to the domestic growing industry.
N. Dharmaraj, President, UPASI said that, dwindling production would not only affect the income of growers but also lead to higher imports, draining the exchequer of valuable foreign exchange.Speaking at a stakeholder meeting organized by the Rubber Board to discuss the current crisis in the rubber sector, Dharmaraj said India has shown the maximum negative growth in production of minus 21 per cent among world producers. This was the result of both low prices & high cost of production compared to other producing countries.
In 2014-15, imports were to the tune of 76 per cent of production & 43 per cent of consumption. At the end of October this year, the stock with growers was only 66,000 tonnes, which is an insignificant quantity taking into account that there are 12 lakh growers. The stocks with dealers, processors, and manufacturers was 1,62,000 tonnes.
The projected production for 2015-16 is expected to be below 600,000 tonnes since large areas are being abandoned due to un-remunerative prices, he added.
“Natural Rubber” imports are even less than domestic production-consumption gap. Where are the ‘unbridled imports’ as UPASI has alleged?” asked Mohinder Gupta, president, All India Rubber Industries Association (AIRIA).
At the same time, UPASI has accepted the fact that the cost of Natural Rubber production in India is higher as compared with other Natural Rubber producing countries. “The government and Rubber Board need to fathom why the cost of Natural Rubber production is the highest in India. Why can’t we incorporate better plantation practices and techniques so that efficiencies increase, cost of Natural Rubber production comes down and the Indian rubber sector becomes competitive ? Why industry should be penalized with higher duties?” he asked.
The Automotive Tyre Manufacturers Association (ATMA) has also contested that Natural Rubber imports have led to a decline in prices in India. “Natural Rubber prices in India continue to be 20-25% higher than international prices. And yet, the entire domestic production is getting consumed by the industry. Imports are imperative as there is acute domestic shortage,” according to Rajiv Budhiraja, director-general, ATMA.
“Overall Natural Rubber consumption in India has contracted in the first half of FY 2015-16, reflecting the decline in Indian value addition. Coming in the wake of the government’s unmistakable emphasis on manufacturing, that is a worrying signal. As shown by the latest statistics, tyre production is down in India and so are tyre exports. Stiff import duties on Natural Rubber and indiscriminate import of Chinese truck and bus radials have gravely affected domestic tyre manufacturing operations,” added Budhraja.
The rubber industry urges the Union government to take a holistic view of the concerns of stakeholders. According to ATMA and AIRIA, merely curbing the import of Natural Rubber as a knee-jerk reaction will be ?a recipe for disaster?.