WITH tight natural rubber supply in the domestic market, the Indian tyre industry is forced to import the material despite the high costs due to falling rupee .
Whilst industry authorities opined that the rupee’s decline may not have a strong impact on natural rubber imports, they are, nonetheless, taking up measures to buffer the impact of a weakened currency.
The global price of block rubber SMR 20 , which is imported for use in tyres is at around Rs 132.84 per kg. But the import of this variety works out to be cheaper because the price of RSS 4, a domestic variety used by the tyre industry, has been rising this month because of a shortage in the market.
In a recent pricing, the RSS 4 price stood at Rs 173 per kg and its equivalent variety in the international market was lower by more than Rs 10. Monsoon rains have also disrupted tapping in main rubber producing regions, such as Kerala.
Reports also indicated that the insufficient supplies in the domestic market could escalate prices. Moreover, higher imports are also triggered by an anticipated increase in the import duty of rubber.