Financial Daily from THE HINDU group of publications
Tuesday, Mar 26, 2002
Agri-Biz & Commodities
Rubco sells 10,000 t to MNC
CHENNAI, March 25
THE Kerala State Rubber Co-operative Ltd (Rubco) has sold 10,000 tonnes of rubber at $575 a tonne to an unidentified multi-national firm for export through a global tender.
"Rubco had floated a tender last month to sell 10,000 tonnes of RSS (ribbed smoked sheet) 4 grade rubber. Two firms responded to the tender and quoted an identical price of $530 a tonne. However, the co-operative negotiated further and has able to get an additional $45 per tonne," a Kerala Government official, who did not wish to be identified, told Business Line.
He, however, declined to identify the buyer as well.
The price offered is based on Singapore commodity rates and the deal has provisions for Rubco to get higher prices if rubber rates rise in the international market. The current offer works to around Rs 28 a kg. This is against Rs 31.50 a kg quoted for RSS 4 on Monday in the domestic market.
As this is a part of the Government's efforts to promote rubber exports, any loss will be borne by the Union and Kerala Governments. For sheet rubber, such as RSS 4, the Centre doles out Rs 3.50 a kg as subsidy, while Kerala foots an equal amount as subsidy. In addition, the Union Government offers a subsidy of 0.75 a kg as handling charges for rubber lifted from producer societies for export.
The Centre also offers Rs 4.50 per kg and Rs 5 per kg subsidies respectively for export of latex and crumb rubber. However, Kerala offers only a subsidy of Rs 2 a kg for these.
Rubco issued a global tender to export 10,000 tonnes of RSS rubber as part of its export promotion efforts. The official said by negotiating with the exporter, Rubco had been able to save Rs 2.16 crore for the Kerala Government. "This is because the export is done on the State Government's account."
Sources said it was a good offer considering the fact that the Kerala State Co-operative Rubber Marketing Federation Ltd (Rubbermark) had been offered only $530 a tonne for the 20,000 tonnes of rubber it proposes to sell on the Centre's account.
Rubco plans to sell more if the State Government asks it. "Right now, the tender is confined only to RSS 4 grade," the official said. In due course, Rubco plans to cover all grades for export.
Rubber procured from January this year was offered through the tender. The tender also gave exporters' an option of appointing an international agency to verify the quality and weight of the shipments.
After rubber prices declined to a seven-year low last year, the Centre launched a slew of initiatives, including fixing minimum statutory price (MSP) and promoting exports and curbing imports.
Rubber prices, which had slipped to Rs 24 a kg for RSS 4 grade towards the second half of 2001, have recovered since then.
Rubco has so far exported 15,000 tonnes of RSS 4 and ISNR 20. The shipments have been sent to countries such as Singapore, South Africa, Pakistan, Spain, China and Kenya.
Rubber exports have received a shot in the arm through subsidies announced by the Union and Kerala Governments.
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