The United Planters Association of South India (UPASI) has expressed its opposition to the demands of tyre manufacturers to reduce the import duty on natural rubber (NR) in the country as it will be detrimental to the interest of the 1.2 million growers dependent on the natural rubber sector.
Vinod Sivappa, UPASI president, said that demand to reduce import duty on rubber has nothing to do with the production deficit but was due to an increase in international rubber prices. The domestic price is currently ruling at Rp160 per kg while, the international price is Rp175.18 per kg. The call for reduction in import duty is nothing but a ploy to further depress domestic prices, he said.
According to Sivappa, there is no reason whatsoever to reduce import duty, especially given the surge in imports of rubber during the last few years, with each year reporting new highs.
He cited that imports in 2008-09 stood at 77,762 tonnes, rising to reach 458,374 tonnes in 2015-16. During the current year, up to December 2016, imports were again higher by 1,334 tonnes.
The surge in imports had been a major factor for the crisis faced by the growers, he added.
International prices are invariably more volatile as evident from the recent increase in prices, which makes the domestic rubber producing sector all the more relevant, he said.
The reason cited by the consuming industry for relaxation of import duty was on the background of the Rubber Board estimates on key variables such as production at 720,000tonnesin relation to consumption at 1.06 million tonnes for FY 2018.
Rubber production, compared to previous years, has reported a clear increase and any attempt to disturb the import duty structure will be counter-productive in augmenting domestic production, he said.
A case in point is the drastic decline in the production level from 913,000 tonnes in 2012-13 to 562,000 tonnes in 2015-16.
From these levels, in the current year (2016-17), production is anticipated to rebound to the level of 650,000 tonnes and 720,000tonnes in 2017-18.
“It is indeed a welcome development and it is anticipated that production will improve and meet the gap between consumption and production,” said Sivappa.