Planters want import duty on rubber raised to 30%

The United Planters' Association of Southern India (UPASI) has urged the government to increase import duty on natural rubber to 30 per cent from the existing levels of 20 per cent to protect domestic growers, who are suffering from huge losses from falling prices.

A reduction in duties on goods imported mainly from the Asean member countries combined with low prices in Thailand and Vietnam has resulted in a massive fall in the prices of rubber in the domestic market

"Unless such an immediate measure is taken, it would affect the livelihood of 1.2 million growers who are involved in growing this important industrial raw material and there is a danger of many growers diversifying to other crops," Vijayan Rajes, president of UPASI said in a pre-budget memorandum.

Refuting claims of the rubber goods industry that imports have not affected local prices, Rajes pointed to data which showed imports have surged in the last few years.

Imports of natural rubber during April-December 2014 increased to 351,000 tonnes compared to 288,000 tonnes during the same period last year, showing an increase of 22% year on year, he said, adding that consumption, on the other hand, increased just 4.4 per cent to 764,000 tonnes from 731,000 tonnes a year ago.

According to UPASI, the porice fall has forced rubber planter to stop tapping, resulting in India,  until recently leading the pecking order in terms of productivity in the world natural rubber map, being pushed down to fifth position.

Currently, prices are ruling at Rs126 per kg against Rs241 per kg in April 2011, a decline of 48 per cent.

Statistics show that imports during the current fiscal is in excess of 116,000 tonnes compared to the domestic requirement, Rajes pointed out.

UPASI wants the government to restrict imports to the demand-supply gap, he said, adding that the piling up of imported inventories is only meant to depress domestic prices.

In order to safeguard the interest of large number of small and marginal growers depending on this important plantation sector, it is necessary that the government should intervene to restrict rubber imports, UPASI said.