The Hindu Business Line : Tyre cos avoid price cut despite rubber price fall

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Cost of natural rubber has seen sharp decline in the last couple of months.
All India Tyre Dealers' Federation urges cos to cut prices by 10-15%.

New Delhi/Kolkata June 23 Despite the fall in prices of natural rubber in the last couple of months, the tyre industry is not looking at reduction in prices, at least in the near future.

This despite the All India Tyre Dealers' Federation (AITDF) urging tyre companies to revise prices as cost of natural rubber has seen a sharp decline in the last couple of months.

Price of RSS-4 grade rubber at Kottayam is currently ruling at around Rs 78 per kg, which is 23 per cent lower than the Rs 106 level at this point last year.

"There is no intention of reducing prices in the near future," an official of JK Industries Ltd, who did not want to be named, said.

According to him, the fall in rubber prices is a temporary phase and costs might go up because of the onset of monsoon in most parts of the country.

Monsoon impact

"Because of the monsoon, rubber tapping is not taking place. All that the industry is being supplied is what has been stored. Apart from this, a lot of us depend on natural rubber imports. Though prices in the international market have come down this is also a temporary phase," he said.

Mr Paras Chowdhury, Managing Director of Ceat Ltd, said: "Rubber prices were ruling above Rs 100 a kg in July last year. To compensate the same we had enhanced tyre prices by 8 per cent in August 2006. However, as rubber prices came down in the following months we rolled back tyre prices by six per cent.

"Accordingly we have already done away with 75 per cent of the price rise effected last year. We do not foresee any roll back of tyre prices at the current level of rubber prices. However, if the rubber prices continue to fall, there may be a possibility of price revision."

Mr Sunam Sarkar, Chief of Corporate Strategy and Marketing of Apollo Tyres, refused to comment on the issue.

The AITDF, in a letter to the tyre companies, said: "Given all the circumstances, fall in rubber prices, both domestic and international, the Federation appeals to the companies to reduce the prices of tyres across various categories by around 10-15 per cent."

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