Tyre makers seek Govt help to check rubber prices Manufacturers to meet Rubber Board Chairman on April 20

Print this page Posted on : 04-14-2009 by recycleinme.com

"Aberrations by way of domestic rubber price being higher by Rs 12 a kg in comparison to the global price, disrupt smooth functioning of tyre companies."

Our Bureau Kochi, April 13

Alarmed by the increase in speculative activity in natural rubber futures trading, the Automotive Tyre Manufacturers Association (ATMA) has sought immediate intervention of the Government.

36% increase

As far as rubber consuming interests are concerned, it is a matter of concern that despite no major change in fundamentals of demand and supply, domestic natural rubber price has increased from Rs 70 a kg on March 1 to Rs 95 on April 9, an increase of 36 per cent in just about a month's time.

The unwarranted increase of natural rubber price has also led to tightness on the supply side. The current supply situation is also out of sync with the encouraging stock level of over two lakh tonnes of natural rubber, as reported by the Rubber Board.

Mr Rajiv Budhiraja, Director General, ATMA, said in a release that international rubber availability is good and with global prices ruling at much lower levels (currently at Rs 82.5 a kg), the domestic tyre industry has stepped up its import volumes.

'Side-stepped'

"This is yet another spell wherein the interests of domestic rubber growers and consumers are being side-stepped by the intermediaries with a view to making short-term speculative gains," he said, adding that large volume of rubber imports is bound to depress the domestic demand for rubber in the near future.

According to the association, aberrations by way of domestic rubber price being higher by over Rs 12 a kg in comparison to the international price, disrupt smooth functioning of tyre companies, besides leading to large scale imports.

Meet on April 20

To take stock of the situation as it has developed and to evolve appropriate course of action for the tyre industry, Heads of Purchase Departments of leading tyre companies and members of ATMA are meeting at Kottayam on April 20.

The ATMA delegation would also meet the Rubber Board Chairman and apprise him of the concerns of the tyre industry and seek the Board's intervention to restore normalcy by isolating the speculative interests and ensuring adequate and timely availability of natural rubber for domestic consumers.

'Reduce intra-day limits'

As an immediate step, ATMA has sought reduction in intra-duty limits for futures trading in natural rubber to be confined to two per cent in comparison to the existing enhanced limit to 4 per cent.

It has further urged that at volatile times like this, futures trading in NR should be temporarily suspended to bring some balance and discipline in the market, which is imperative in the long-term interest of NR growing and consuming interests alike.

Source : Business Line