Rubber price hike puts industry into quandary

Kochi, May 30 (UNI) Even as the record prices for natural rubber has brought cheers to the farmers, it has triggered a hike in the prices of rubber products and put many auxiliary industries into dilemma.

Tread rubber manufacturers today set the ball rolling for an offshoot impact by increasing the prices of tread rubber. Many more were tipped to follow suit while some remained clueless.

The All Kerala Small Scale Tread Rubber Manufacturers Association increased the prices of their products by Rs ten per kg to tide over the crisis, also caused by the doubling of prices of carbon black and synthetic oil, both by-products of petroleum.

Rubber prices had crossed Rs 100 per kg recently bringing cheers to the farmers and continued its bullish trend, amid rumours that it would still go up.

''The increase has effected Rs 20 hike in the production cost. But we are also facing competition from imported rubber compound that has hit the North Indian markets,'' Association General Secretary George Varghese told a news conference here today.

There are 250 tread rubber manufacturing units in Kerala, with each unit consuming about 15 tonne of rubber as raw material every month. About small 100 units were paralysed already, he said.

Industry sources also pointed out that the tyre manufacturing and retreading sectors along with large number of auxiliary industries, too, were facing a tough time as they cannot increase the prices of their products proportionate to the margin on natural rubber.

The tread rubber manufacturers urged the government and the Rubber Board to forego the existing cess.

The sources also claimed that inferior rubber compounds were being imported into markets like Delhi and Kolkata from countries like South Africa, Indonesia and Malysia as an alternative to natural rubber.

UNI JA GM 1430