The Hindu Business Line : Core panel to look into rubber sector issues

A CORE group comprising representatives of rubber consuming industries, producers and processors has been set up to resolve current issues prevailing in the rubber sector.

This 15-member committee was formed at a meeting organised by the Rubber Board here on Thursday. The board called the meeting as natural rubber prices has soared to record levels in the domestic market.

Industry sources said about 75 people representing the various stakeholders of the rubber sector attended the meeting, which deliberated on issues such as subsidy for rubber exports, deemed exports status, introduction of a price band and local taxes.

The Rubber Board officials, including the Chairman, Mr S.M. Desalphine, Automotive Tyre Manufacturer's Association (ATMA), All India Rubber Industries Association, rubber producing societies, UPASI, Chemical and Allied Products Export Promotion Council (Capexil), rubber processors and dealers attended the meeting, which was called at the behest of rubber consuming industries as they have been hit hard by the rising prices.

The sources said export subsidy on rubber was the main bone of contention between the consuming industries and producers. ATMA and other consumers said they were not against exports, but only wanted the subsidy to be lifted.

The Government introduced the subsidy ranging between Rs 3.50 and Rs 5 in order to give a fillip to rubber exports in the Tenth Plan. Rubber exports have already overshot the target of one lakh tonnes for the Plan period in just two years.

ATMA suggested that they would shun exports and would buy rubber only from the domestic market, provided the status of deemed exports was given for the domestic purchases. The association also called for introduction of a price band for the commodity.

There was also demand for restricting exports when prices shoot up on condition that consumers will not go in for imports when domestic prices fall below a stipulated rate.

On its part, the side representing rubber growers and societies said they were willing to forego the subsidy for exports during the lean period of production but want it to be restored during October to April when production is ample.

They also said the current shortage of rubber in the domestic market was temporary, occurred due to early monsoons affecting tapping. There would not be any problems relating to availability of rubber in the coming months.

The meeting also deliberated on the issue of sales tax in Kerala and wanted it to be brought down. Kerala imposes a sales tax of 12.5 per cent on rubber, while Tamil Nadu and Karnataka levy only 8 per cent and 4 per cent, respectively.

The Rubber Board, on its part, did not come out with any suggestions since its role was limited to providing a platform for the brainstorming.