The Hindu Business Line : Rubber exports set to resume

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Chennai Feb. 18 Rubber exports, which had come to a standstill for the last 4-5 months, are set to resume. The Rubber Board is keen on exports continuing and has, therefore, called for a meeting of exporters in Kottayam on Monday.

"We have called for a meeting of exporters on Monday. We want exports to continue as we want to be vigilant against any sharp fall in rubber prices with domestic companies keeping away due to high inventories," said Mr Sajan Peter, Chairman of Rubber Board, over telephone from Kottayam.

Stocks as of January 31 are 1.72 lakh tonnes, a recent high, and taking this into consideration some of the buyers are keeping away from making any purchase.

"We want to support export and there is a scope for it," he said. But those in exports say the difference between the price in the domestic and global market are not in their favour.

Prices are not favourable yet, though we are exporting RSS 1 in small quantities," said Prof K.K. Abraham of the Pala Cooperative Marketing Society. The society recently got orders to export two containers (of 20 tonnes each) of RSS 1.

"There is a scope if there is a difference of at least Rs 5 between prices here and in Bangkok. But it is less and freight and packing will all nullify those advantage," said Mr N. Radhakrishnan of the Cochin Rubber Traders Association.

Packing costs

"We pack our rubber consignment in 50-kg. This also adds to our cost," he said. Currently, RSS 4 in the domestic market is ruling at Rs 97.50 a kg. Against this, its equivalent in Bangkok market is quoted at Rs 102-103. However, traders say they aren't impressed with the prices. "There is a problem with the calculation of the Bangkok rates. The Thai baht is rising against the dollar everyday. And what people are doing is that they convert the baht to dollar and then to rupee," said Mr Radhakrishnan.

Prof Abraham also said there were problems with conversion of the currency rates. Mr Peter said the difference in domestic and global prices should encourage exports.

"At one point of time, the difference was Rs 15 a kg. Exporters could have taken advantage of it," he said.

Latex advantage

Periyar Latex, a firm run jointly by the Rubber Board and Rubber Producers Association, has taken advantage to contract exports, particularly latex. Details regarding this, however, are not available. Mr Radhakrishnan said: "Stocks are building up and imports are taking place. The Rubber Board doesn't want the growers caught on the wrong foot when prices crash. Therefore, the emphasis is to export to the maximum extent possible."

Also, the board is of the view that our exporters should not be present for just six months in a year and then vanish. That will affect our credibility. Therefore, the meeting could ask exporters to continue exports, judiciously balancing gains and loss."

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