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The Kerala government has appealed to the Centre to hike the import duty on natural rubber besides seeking more funds for the price stabilisation fund. State Finance Minister KM Mani met Prime Minister Narendra Modi on Wednesday and discussed the issue.
“Rubber prices have come down to ₹110 a kg this year from a high of ₹270 last year. The main reason for this is increasing imports,” Mani told reporters here.
Against the deficit (between demand and supply) of 60,000 tonnes, total import was actually four lakh tonnes. This kind of dumping was done to affect the domestic price, he said.
Mani requested the Prime Minister to increase the import duty to 25 per cent ad valorem (duty as a percentage of the value). Currently, the duty is 20 per cent or ₹30 a kg, whichever is lower. “Although, the PM did not give any commitment, I am confident that something will be done,” he said.
The southern State also asked for an additional ₹500 crore allocation for the price stabilisation fund. Currently, the corpus is ₹300 crore.
“A total corpus of ₹800 crore will help to purchase 50,000 tonnes of rubber at reasonable price,” Mani said, adding that this will aid in improving the yield.
Kerala accounts for over 90 per cent of total rubber production in the country. Around 11.5 lakh farmers are engaged in rubber plantation on around 5.5 lakh hectares land in the State.
However, due to un-remunerative prices, production of natural rubber has dropped to around 6.55 lakh tonnes in 2014-15 from 7.74 lakh tonnes a year ago, according to the latest figures released by the Rubber Board.
Total rubber consumption by various industries, including tyre manufacturers, was 10.18 lakh tonnes during 2014-15, 3.7 per cent more than the previous year.
Recently, the Association of Planters of Kerala analysed the production, imports, exports and consumption patterns. It revealed that an additional stock of approximately 5.5 lakh tonnes is available in the country, which is enough to meet the demands of the consuming industry even if no production takes place.
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