The Hindu Business Line : Rubber Board calls for tough stand on market speculators

Chairman says
India’s natural rubber sector no more insulated from world market.
Increasing dominance of Asia changing consumption patterns.
Cost competitiveness, quality enhancements key to growth.

Our Bureau

Mumbai, Oct. 1There is need for a tough stand against speculators who manipulate the natural rubber (NR) future markets, said Mr Sajen Peter, Chairman, Rubber Board. Too much volatility in prices could be damaging to the interests of all the stakeholders, he added.

Addressing the All India Rubber Industries Association (AIRIA), he said that the price of commodities, especially industrial raw materials, is determined by trends in the expansion of the world economy. The record growth in the world economy has led to similar growth in raw material prices.

“One has to accept the fact that the country’s natural rubber sector is no more insulated from the world market and that the prevailing prices would more or less reflect the trends in the world market.

The greatest impact on the trade in natural rubber was the lifting of the quantitative restrictions.

Even after lifting the restrictions, the domestic price was lower than the world market price.

Hence, the consumers in India were not at all at a disadvantage as compared to their counterparts elsewhere,” he said.

There is a change in the pattern of rubber consumption due to the increasing dominance of Asia, and this is having a critical impact on the prospects of the industry.

Consumption patterns

The share of natural rubber in total elastomer consumption has been increasing in recent years due to the cost disadvantage of synthetic rubber because of the oil market developments, he observed.

The non-tyre rubber products manufacturing sector in India, with many small and medium scale units, will find it difficult to cope with the increase in raw material costs. But there are no short cuts, says Mr Peter. “The only strategy to survive would be modernisation of the manufacturing process to achieve cost competitiveness and quality enhancements.”

Import duties

On import duties, he said that they are ‘relatively’ lower compared to that of other comparable plantation crops from the growers’ point of view. The tariff support being given to the natural rubber sector is mainly to ensure domestic supply in the context of the expected increase in demand. Meanwhile, All India Rubber Industries Association elected Mr M.F. Vora as the new President and Mr Suresh Elwadhi as Vice-President.

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