Shortage of Natural Rubber Affecting Tyre Production, Allow Free Import - ATMA
Published On 26-Nov-2021
Tyre Manufacturing Association seeks government intervention to allow 4.4 lakh tonne free shipment and help bridge the demand-supply gap.
The Automotive Tyre Manufacturers Association (ATMA) has requested the government to sanction the free import of Natural Rubber (NR) to meet the projected demand-supply gap. As per Rubber Board of India figures, the domestic supply deficit for FY 2022, which was projected to be around 45 per cent of the 3.4 lakh metric tonne production at the start of the year, has now been estimated to surge to 55 per cent of production at a whopping 4.4 lakh metric tonne.
Inadequate supply troubling production
The ATMA, in a letter written to the Union Minister of Commerce and Industry, highlighted the situation and said that a severe shortage of Natural Rubber is troubling the production process even at the time when demand is high post-pandemic. Citing the deficit of Natural Rubber at the peak of production season in Kerala, the tyre association body said this seems to be overshadowing the tyre industry value chain. It further added that average domestic production should be around 75,000 MT in October and November, but the same isn’t expected to exceed 45,000-50,000 MT this time.
Talking about the consumption in the letter, ATMA said that it is expected to remain at more than 1 lakh metric tonne during October and November, with a subsequent shortage of 1 lakh metric tonne in a short period of two months of the current peak production. It will lead to a major concern for the tyre industry that normally consumes about 75 per cent of the overall Natural Rubber produced in India.
Scarcity at the time of peak demand
Rajiv Budhraja, Director General, ATMA, said that the shortfall comes at a time when the production of commercial vehicles at the domestic level is increasing after an extended slump. On the other hand, the Truck and Bus segment has comparatively higher Natural Rubber (NR) content, and therefore, the demand is expected to surge further, but the non-availability of the NR will disrupt the work. So, to ensure uninterrupted tyre production and exports, the government need to allow the free import of Natural Rubber to meet the supply deficit of 4.4 lakh MT.
ATMA further adds that duty-free import capacity can be reviewed annually, as the Tariff Rate Quota (TRF) quantity is in accordance with the production and consumption estimates proposed by the Rubber Board. The tyre manufacturing body also wanted to dispel the concerns that the import of Natural Rubber is higher than the shortage and thus, triggering downward pressure on the domestic prices.
It emphasized that NR imports by the tyre industry will be mere to meet the supply deficit as the import figures match up with the deficit numbers, assuring that whenever domestic availability has improved, the NR import is curtailed by the tyre industry.
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