According to N Radhakrishnan, former president, Cochin Rubber Merchants Association, the government's proposal to enhance the import duty has enthused farmers, as a rise in duty adversely affects imports. The Union government had decided to increase the duty from Rs 20 a kg to a maximum of Rs 34.2 a kg. The ministry of commerce will soon issue a notification in this regard. Though international prices are below local rates, higher duty might dampen the prospects of more imports into the country. As a result of these two factors, growers now expect a temporary supply crunch. The trend is likely to continue for the next four-five weeks.
The slow growth in production during the past five years is a serious issue. Rubber-based industries, especially tyre companies, opt for the import route as the domestic market does not have enough saleable stocks. In 2006-07, total production was 852,895 tonnes.
This went up to 903,700 tonnes in 2011-12, recording a cumulative growth of six per cent. However, consumption had increased at a much faster pace of 16 per cent during the period. In 2006-07, total consumption was 820,000 tonnes, which edged up to 964,000 tonnes in 2011-12.