Chief Minister Oommen Chandy has said that the price of natural rubber has begun to look up, thanks to the concerted efforts of the government, tyre companies, and the rubber industry.
In a statement here on Saturday, Mr. Chandy said the price of rubber had risen from Rs.115 a kg on December 18, the day on which the government convened a meeting of tyre industry representatives, to Rs.130.45 a kg on Friday. Tyre companies alone had procured 2,400 tonnes of rubber on Friday. The Chief Minister said rubber price began to improve mainly because of the government’s decision to waive sales tax on natural rubber. The government had done so foregoing its tax revenue. The tyre companies were importing rubber paying 20 per cent duty at international price. Since they had begun to purchase rubber from the domestic market, the rubber growers were getting the amount equivalent to the import duty as price. This arrangement had proved beneficial to the tyre companies too.
The government had decided to go for the new arrangement as attempts at rubber procurement through State agencies had failed to take off. The Union government had refused to intervene in the market. Rubber-producing countries had also failed to arrest the fall in rubber price. The State government was able to convince the tyre companies that an uncontrolled fall in rubber price would ultimately harm them. With the government stepping in, rubber growers, who had begun to turn to other crops, had also gained in confidence, Mr. Chandy said.