The Hindu Business Line : Poor rubber supplies hit tyre cos

Kochi, Aug. 13 Continued non-availability of natural rubber despite the prices shooting up to an historic high of Rs 140 per kg has put the production planning of tyre companies in disarray.

In a communication to Mr Ajay Shankar, Secretary, Department of Industrial Policy and Promotion, Commerce Ministry, the Chairman of Automotive Tyre Manufacturers Association (ATMA), Mr Raghupati Singhania, pointed out that the current availability of natural rubber has become quite precarious and uncertainty of adequate supplies looms large for the industry. Such a situation has not been witnessed in the past when availability, irrespective of the price levels or seasonal factors, was not such a major issue of concern, he said.

According to ATMA, the ground level situation does not bear out Rubber Board’s assertion that enough stock of natural rubber is available due to significant jump in production.

“Notwithstanding stock position of natural rubber being close to 1.14 lakh tonnes in end-July 2008 (as estimated by the Rubber Board), the ground level availability position is different and not indicative of the stock projections,” Mr Singhania said.

The current high price levels appear to have prompted the interested parties to have entered into an oversold position with no matching supplies actually coming to the market, ATMA felt.

Currently, the domestic spot price of natural rubber has reached Rs 142 a kg, about Rs 15 a kg more than the prevailing international prices. ATMA has reiterated the need for duty-free import of at least 100,000 tonnes of natural rubber on priority with a view to tiding over the current “crisis-like” situation.

A similar situation of demand-supply imbalance had developed in the past (1995) and the Government had allowed duty-free import of natural rubber, he said.

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