According to the figures available with The Financial Express, import of natural rubber hit the record 25,000-tonnes mark during the financial year 1997-98. This was the highest ever quantity imported by the rubber-consuming industry ever since imports were allowed against exports in 1992-93. It may be mentioned that of the 51,635 tonnes imported during 1995-96, 35,000 were under the Public Notice Scheme.

The highest-ever imports under the ALS assumes significance as the rubber goods industry had ruled out the possibility of imports at several meetings of the Rubber Monitoring Group early last year.

It may be recalledthat the central government, as part of its export promotion drive had allowed rubber goods manufacturers to import natural rubber against exports in 1992-93. According to the prevailing norms, natural rubber can be imported under ALS, Special Import Licence (SIL) and through public notice.

ALS permits an exporter to import natural rubber worth 53 per cent of the value of exports, 44 per cent NR and nine per cent of synthetic rubber. The public notice route was used last by the Government to import 35,000 tonnes of natural rubber in 1992-93 when the domestic prices skyrocketed to an average Rs 54.25 per kg. Imports thorough SIL were so far negligible as the premium was considerably high.

However, industry sources maintained that imports were in no way responsible for the crash in rubber prices. According to their estimates, the rubber-consuming industry was entitled to import over 60,000 tonnes of raw material against exports during last year.

Top sources in the Rubber Board also feel that imports werein no way related with the crash in prices.

In fact, the Rubber Board chairman is on record saying that imports had only led to more demand for domestic rubber as it spurred exports and hence higher production levels for industry. He also said any clamp down on imports would hit not only exports but also production levels, leading to further fall in domestic consumption.

Rubber Board sources, however, feel a major reason for the crash in prices was the declining domestic demand. Top sources in the board pointed out the total sales of heavy and light commercial vehicles tyres registered a 13.67 per cent decline during the last fiscal leading to a corresponding dip in their consumption.

According to the estimates of Automotive Tyre Manufacturing Association (ATMA), the total sales of HCV and MCV tyres were 65,35,000 in 1997-98 compared to 75,70,000 in the previous year.

They said the demand for natural rubber was essentially derived from the HCV and MCV tyre sectors and any variation in their productionlevel would have an equal and immediate impact on the demand for the raw material. The automotive tyre manufacturing industry accounted for over 60 per cent of the total rubber consumption, they pointed out. However, sources pointed out that the industry resorted to record imports when the raw material was available in the domestic market. According to conservative estimates, the excess supply of natural rubber was put at 1,5 lakh tonnes, including the 1.1 lakh tonnes of opening stock. Opening stock was derived by taking average demand for the commodity for three months.

Experts also said that more than imports the threat of imports was the major reason that hammered the prices down.

"More than actual imports, the threat of imports has to be reckoned with when one examines commodity prices," T M Thomas Isaac, member, State Planning Board, has said.

He said buyers could always raise the import bogey to hammer down prices. He also feels that the Government should impose duty on imports to prevent furtherimports.