MUMBAI, Feb 27 (Reuters) - India, the world's fourth largest
rubber producer, could increase import duties on natural rubber
by 70 percent as early as Wednesday in order to support falling
local prices, two industry sources and one government official
The government wants to fix import duties at 34 rupees per
kg, or 20 percent, whichever is lower, said an official with the
state-run Rubber Board, who declined to be named. The existing
duty is 20 rupees per kg, or 20 percent, whichever is lower.
Domestic rubber prices have fallen nearly 20 percent in the
last five months on sluggish demand and a 19 percent surge in
cheap imports. India imports natural rubber from Malaysia,
Thailand and Indonesia.
"The commerce ministry has assured members of parliament
from Kerala about raising the duty. Probably today the
government will issue a notification," said a senior official
with a leading tyre company, who declined to be named.
The southern state of Kerala accounts for nearly 90 percent
of India's natural rubber production.
On Tuesday, the spot price of the most-traded RSS-4 rubber
(ribbed, smoked sheet) in the Kottayam market in India was
15,650 rupees per 100 kg, while Malaysian SMR 20, which Indian
tyre makers prefer to import, stood at 15,818 rupees.
That would put a 20 percent import duty at 31.64 rupees per
kg on the Malaysian SMR 20 imports.
Indian spot prices will be updated around 0630 GMT.
Indian natural rubber imports in the first 10 months of the
financial year that started on April 1, 2012 were 19 percent
higher year-on-year at 197,113 tonnes.
Thai RSS3 rubber changed hands at $2.97 to $3 per kg for
March-May, its lowest since November, while Indonesia's SIR20
was sold at a two-month low of 130.25 to 131.25 cents/lb for
March-April, after Tokyo futures plunged from a 10-month high,
dealers said on Wednesday.
(Reporting by Rajendra Jadhav; Additional reporting by Lewa
Pardomuan in Singapore; Editing by Jo Winterbottom and Miral