The Hindu Business Line : `Rubber price rise hits small units'

The unprecedented increase in the price of natural rubber over the past couple of months has severely hit small industrial units using rubber as their main raw material, according to All-India Rubber Industries Association.

In a letter to the Union Commerce Minister, Mr Kamal Nath, the association said that a majority of the units were being closed down due to the high natural rubber prices and scarcity of rubber.

The units that are working are running up losses because they are functioning at 30-35 per cent of their installed capacity, the association said, urging the Minister to take steps to temporarily ban exports of natural rubber from India.

Earlier, tyre manufacturers too had demanded the same, saying that exports of natural rubber from the country would further deplete stocks in the domestic market.

The Rubber Board has projected exports of 50,000 tonnes for the current fiscal. Natural rubber is ruling at Rs 95 a kg and is expected to cross Rs 100 in the coming weeks.

The association said the current market trend had already disrupted the rubber industry and if the Government wants to protect the interest of rubber consuming sector, it should pass orders suspending exports of rubber immediately.

The association also said growers and dealers are resorting to hoarding of natural rubber. "In the past, average stocks have lasted for two months' consumption but now it is enough for just about a month's usage. The shrinking stock position is adversely impacting prices in the domestic market."