A policy framework which will allow the Indian government to better deal with rubber stakeholders including producers, consumers and manufacturers, is underway.
“The policy is being formulated to address demands of the rubber industry and growers. The committee is looking at all the issues concerning the sector and it would evolve a suitable regime for production, consumption, manufacture and imports of rubber in the short and long term,” a senior commerce ministry official said.
The government is also formulating an insurance-based scheme to boost the production of the plantation crop.
The Commerce Ministry has also started an exercise of resetting the goals and functions of the Rubber Board. To formulate the National Rubber Policy, a committee consisting of experts and stakeholders has already been set up,. Further, an insurance-based scheme to operate the price stabilisation fund for the commodity has been prepared and submitted to the Finance Ministry for its approval. The scheme is designed to cover losses to growers arising from fluctuations in yield and prices. It would be implemented in cooperation with insurance companies. To reset the goals and functions of the Rubber Board, the commerce ministry has consulted the stake holders. “The ministry has identified the changes needed at the policy, institutional and organisational level. The work regarding this is on,” the official said. The persistent fall in the price of natural rubber has caused concern among rubber farmers in Kerala, which accounts for more than 94 % of the commodity’s total production in the country. Farmers had also raised concerns over increasing rubber imports. Last year India had imported over 3 lakh tonnes of rubber and this year, it is expected to touch about 4 lakh tonnes. Rubber price, which ruled around Rs 220 per kg in January 2011, had touched a low of Rs 123 per kg in the domestic market. The total area under rubber cultivation in Kerala is at 5.45 lakh hectares. It is the livelihood of as many as 11.50 lakh farmers with most of them small holders having less than 1.5 hectares under rubber. Total rubber production in Kerala for the year 2012-13 stood at 8 lakh tonnes. India’s imports have reached 4 lakh tonnes annually. Imports increased notwithstanding the Centre raising import duty on natural rubber to Rs 30 per kg or 20 %, whichever is lower, in December 2013. Rubber growers have been demanding that the Centre take steps to get them fair price for their product. They also want an increase in import duty of rubber.”
Indonesian government seeks to increase domestic rubber consumption
The Indonesian government still seeks to increase the sale price of the country’s natural rubber in the international market, which is presently deemed too low. “The price is very low, at US$1.5 per kg, whereas rubber prices in 2011 saw US$4.61 per kg,” Trade Minister Rachmat Gobel said in his office on Thursday, April 9, 2015. Thus, he added, the government would push for the increased use domestic national rubber through joint endeavors involving the Industry Ministry, the Public Works and Public Housing Ministry and the Agency for the Assessment and Application of Technology (BPPT). Indonesia is presently the largest natural rubber producer with total production of 3.1 million tons and US$4.7 billion in foreign exchange revenue in 2014. The minister said domestic industries only absorbed 18 % of the huge rubber production, a figure relatively low compared to other countries, such as Malaysia, which saw 40 %. Rachmat said the low figure had resulted in plunging rubber prices due to oversupplies. Rachmat said he would jack up domestic rubber consumption by 100,000 tons per year. “For 2015, the minimum target is 700,000 tons.” He explained the government would draw on natural rubber to support the country’s infrastructure projects, and that the use of domestic rubber would be maximized using the budget allocation of Rp 118 trillion from the state budget. Separately, Taufik Widjojono, the interim secretary general of the Public Works and Public Housing Ministry, said some 60,000-80,000 tons of rubber could be absorbed annually to be mixed with asphalt, explaining that this sort of asphalt was more durable. “It’s more elastic and the pores are smaller, so it’s more resistant to water,” he said