ISSUES IN LATEX PROCESSING

Santosh KumarVice president, Association of Latex

processors of Kerala

Latex Processing -StatisticsProfile of Concentrated Latex Processing Industry in India

Total number of latex processing factories: 75Total installed capacity: 2,35,000 m.tons of DRCProduction during 2012-13: 73,150 tonnes of DRC (8.0% of the total quantity of 913,700 tonnes of NR production in India).Capacity utilisation: 31.1 %Domestic consumption: 76,705 tonnes of DRC which is 7.9% of the total quantity of 972,705 tonnes of NR consumed in the country during 2012-13. 

Qty (Mt)  2011-12 2012-13p 2013-14pProduction 76490 73150 68000

Consumption 73190 76705 77500Import 1775 63 2378Export 15127 7052 1318

Capacity 216000 235000 235000

GROWTH AND CURRENT STATUS OF INDIAN LATEX INDUSTRY :

Production of centrifuged latex peaked in India from the low level of 6,000 tonnes in 1972 to touch 90,950 tonnes in 2005-06, but came down thereafter to reach the level of 73,150 tonnes in 2012-13 and 68,000 in 2013-14

2012-13 2011-12 2010-11 2009-10 2008-09 2007-08Production (Tonnes) 73,150 76,490 76,065 85,760 88,070 88,305

Consumption (Tonnes) 76,705 73,190 77,380 82,515 80,520 77,715

Closing stock (Tonnes) 21,760 17,285 13,945 13,435 11,385 13,285

DEMAND AND SUPPLY OF LATEX FOR THE NEXT 10 YEARS

The domestic consumption pattern of Latex during the last five years shows a mixed picture with slight improved consumption in 2013-14

2013-14 2014-15 2015-16 2016-17 2017-18 2019-19Production (Tonnes) 68,000 72,080 79,288 87,217 95,940 105,530Consumption (Tonnes) 77,500 82,150 87,079 92,304 97,842 103,713

Based on the past rate of consumption, it is expected that the Latex based industry can grow at the rate of 5 to 6% annually as given below: Since the capacity utilization is very low ,the processing industry can meet any increase in demand in the near future.

Latex Producers concerns over import of large quantities of NR latex and the resultant impact on domestic price of NR Latex

2011-12 2012-13p 2013-14p1775 63 2378

IMPORT OF LATEX (Mt)

CONCERNS – PROCESSING OR TRADING ?

There are 2 basic threats to this industry

Import of latex based finished goods from ASEAN nations And China under the inverted Duty structure.

Import of Cenex from south East Asian nations through the window of Advanced license scheme.

There seems that there are no proper controls on the use of the imported material and its usage by the importer. A good quantity of material is being imported as a cheaper alternative to higher domestic prices and using the long window of export to divert imported material into local market and use favourable price points for Export.

MISUSE OF ADVANCE IMPORT LICENSES

This leads to

- Kills the motivation of local industry to produce- Reduces local prices of produce.- leads to dumping of local markets with international

products

Present Import structure

The present import duty is Rs.49/- or 70% whichever is lower. This is based on 3 points - Adequate processing capability is available in the country. - 40% of the concentrate is water import of material entails import of 40% water at the cost of precious foreign exchange. - A very high farm gate price of field latex (95%) to the grower compared to other forms of Rubber

Suggestions

• We further submit that:• 1) there should be a ban on the import of Latex based

rubber products which are being manufactured in India• 2) latex concentrates are exported on a regular basis,

by evolving a mechanism to ensure that such exports can take place even when the domestic prices are higher

• 3) to encourage and promote latex based small and medium scale units and with Technical, financial and marketing support from the Rubber Board.

THANK YOU