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Commodity News
Apr 27 2007 11:15AM
Rubber exports likely to drop on poor quality, firm rupee

Kochi, Apr 27 - Natural rubber exports from India in 2007-08 [Apr-Mar] may be hit because of quality problems as well as the rupee gaining strength against the dollar, dealers said today. The gap between domestic and global prices narrowing down to less than Rs. 10 per kg will also hit efforts to boost exports, they said. Overseas buyers are reluctant to place orders with Indian exporters due to quality problems, said N. Radhakrishnan, president, Cochin Rubber Merchants' Association. Some exporters have shipped inferior quality rubber during 2006-07 and overseas customers have brought this to the notice of Rubber Board, he said. In a meeting with exporters in Kottayam on Wednesday, Rubber Board officials have stressed the need for maintaining quality, he said. Rubber Board should inspect export consignments to ensure the quality, he said."Rubber Board used to do this till 2004-05 when rubber exports received financial assistance from commerce ministry," Radhakrishnan said. However, the practice was discontinued when subsidy was fully withdrawn in 2006-07, he said.Exports from India have dipped in the second-half of 2006-07, as overseas buyers started avoiding Indian exporters, said another dealer. In the first-half of 2006-07, nearly 46,000 tn rubber were exported while in the second-half exports hovered around 7,000-8,000 tn. Apart from domestic prices firming up, compared with global rates, inferior quality of rubber also played a role in exports falling during the second-half, he added.In 2007-08 [Apr-Mar] so far, not much exports have taken place, despite domestic prices staying lower when compared with global rates, dealers said. Gap between Bangkok and Indian price narrowing down to less than Rs. 10 per kg during the last three days will further hit exports, dealers said.The rupee gaining strength against the dollar is another factor that will keep away overseas buyers from India, dealers said. Provisional estimates of Rubber Board placed natural rubber imports in India at over 85,000 tn in 2006-07, while exports were pegged just over 54,000 tn. Rubber Board is targeting to export at least 50,000 tn natural rubber in 2007-08.

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