March 22: The Kannur (Kerala)-based Rubco is all set to make a major breakthrough on the export front by clinching the first bulk order for exporting natural rubber from the country. In a related development, the state government has directed Rubco to procure an additional 8,000 tonnes of rubber as the Kerala State Ware Housing Corporation, another state-run agency, has failed in its procurement job following a severe cash crunch. Jacob Mathew, managing director of Rubco, told The Financial Express that the agency's negotiations with the foreign party for exporting a bulk quantity of rubber were at "a very advanced stage". He said the cooperative (ie Rubco) was expecting to ink the agreement by March-end. "We are expecting to receive the letter of credit from the foreign buyer in a week or two", he added.However, he refused to divulge the name of the foreign buyer with whom the agency is negotiating. He said Rubco had been negotiating with half a dozen parties and it was not appropriate on itspart to divulge the information at this critical juncture. "We are getting enquiries from a couple of countries regarding both bulk and partial exports", he added.
The Rubco managing director, however, said the agency's attempts to enter the international market as an exporter had been affected by India's status as a net importer of the commodity till recently. He said most of the rubber importing countries had not so far used Indian rubber and, therefore, the agency had to make strenuous attempts to convince them about the quality of Indian rubber. The delay in clinching the export deal follows the agency's attempt to get a better price for the commodity, he said. However, he added that Rubco was not looking for profits from the deal. "We are only trying to minimise the loss and not expecting any profit", he said.
It may be recalled that the state government recently went on record as saying that it would ship 20,000 tonnes of rubber within a couple of months' time in a bid to stem the rapid fall inprices. According to a Government Order issued in January, the state has offered to "make good the loss incurred (by agencies) for exporting" natural rubber.
Meanwhile, the state government has asked Rubco to procure an additional 8,000 tonnes of rubber from the market as part of its fire-fighting mission. Sources said that the government's move follows the failure of the Ware Housing Corporation to fulfil its mandate of procuring 8,000 tonnes at Rs 2 higher than the ruling market price.
The government had in January asked Rubco and the Ware Housing Corporation to procure 20,000 tonnes of rubber from the market; 12,000 tonnes by Rubco and 8,000 tonnes by Ware Housing Corporation.
However, the latter's procurement drive hit a roadblock following a severe cash crunch.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
