The Hindu Business Line : Rubber growers unhappy over falling prices

In reply to a question about the sharp decline in rubber prices following the liberalisation of rubber import and reduction of export subsidy, the Kerala Chief Minister, Mr Oommen Chandy, told Business Line that during his recent visit to New Delhi the matter was taken up with the Prime Minister and he hoped that the whole issue would be reviewed and a favourable decision taken in the matter.

Mr Chandy was answering questions at a `meet the press ' programme arranged by the Press Club in Kottayam, his hometown, the first since he assumed office as Chief Minister.

The import restrictions and the export subsidy in fact brought up the prices to a remunerative level and the rubber growers had welcomed both the steps as it gradually improved the adverse conditions prevailed in the plantation areas a couple of years ago.

Early last month, the Government had scrapped the port restriction despite the fact that the Supreme Court had dismissed the petitions filed by Ceat to disband port restrictions.

The reduction of export subsidy was another blow to the already sagging physical rubber market. Rubber prices had touched Rs 67.50 per kg for RSS 4 by the middle of July. This now stands reduced to Rs 53.50 a kg as per the market quotations on September 4.

The price fluctuations could be controlled to a great extent during 2003-2004 as monthly exports touched 5,000-6,000 tonnes. But during the current fiscal only 6,000 tonnes have been exported from April to August though the imports exceeded 25,000 tonnes during the same period.

The imports were mainly the low priced TSR 20 grade, which was instrumental to major consumers in keeping off the domestic market to depress the price.

The peak season in rubber will start by October and the market may fall further on the weight of improved supply. Informed sources expressed concern that the price may fall below remunerative level as the production peaks in the month of October, November and December.