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Suitable time for Rubber Import

“The latest trend shows that Import has not been taken place and  high prices in Domestic market to bring the month end stock high. It will continue for 6 more days, because orders of rubber demanded on previous month and arranges dispatch within 7 days. That may be a reason by the dealers to  give month end stock before dispatching and the manufacturers will include the same quantity as including transit as month end stock  means a doubling may occur in month end stock. The Import can be done after 7th August which will reflect on International price with an increase.”

I regret to disagree with the conclusions of dhanakaryam (mathrubhumi daily) on  28-07-08. On account of heavy rain in Kerala the daily production will be blocked. The weekly review done by Mathrubhumi dhanakaryam says that the total production from April to June was 1.77,750 Tonnes.  The same dhanakaryam says one more argument by the dealers that farmers are holding rubber to fetch Rs. 150/Kg. Is it possible? The present Domestic price is higher than International which is favorable for the farmers to sell maximum stock and manufacturers to import on 0% import duty. As per the Monthly Rubber Statistics of Rubber Board on August 2007 the production from April to June was 1,43,630 Tonnes and stock with farmers at the end of June was 31190 Tonnes which calculation are related with the stock with dealers & processors as 30105 Tonnes. The Indian Rubber Board always calculates the stock with grower nearer to the stock with dealers. When the stock with dealers goes up the stock with grower also goes up. Eg. the month end stock of February 2008 stock with growers was 59535 Tonnes and stock with dealers & processors was 60660 Tonnes. Actually the stock with grower is related with price. When the domestic prices are higher than International farmers will sell maximum to fetch maximum prices and stock with dealers will be low. And when the International price is higher than domestic farmers will hold rubber in a hope to get a reasonable price. At that time stock with dealer must be lower at the end of respective months.

The Rubber Dealers Federation publishing the prices of various grades at domestic and FOB prices. But the Indian Rubber Board is unable to publish the same. They will wait to publish the daily prices after 4 PM covers only RSS 4, RSS 5, Latex 60% drc and ISNR 20. The Manorama daily is publishing dealers price (Vyaparivila) at their own interest to control the small scale dealers in Kerala. The smuggling through the borders to avoid  VAT & cess will not include in any account of production or consumption. All the export from Kerala is to save VAT and to promote exploitation in grading of sheets.

The reason for the reduction in International price may be due to the Indian export. The present domestic price is higher and International price is lesser will induce more import and will gradually result in the increase of International price.

mthr-dhanakaryam is an evidence for the statements of closing price on International RSS4 as Rs. 135.68/Kg on 18-07-08 (published on 21-07-08 ) and after one week stats that the previous price on 18-07-08 was 138.64/Kg (published on 28-07-08 ).

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