ISSUES IN LATEX PROCESSING Santosh Kumar Vice president

ISSUES IN LATEX PROCESSING Santosh Kumar Vice president, Association of Latex processors of Kerala

Latex Processing -Statistics Profile of Concentrated Latex Processing Industry in India Total number of latex processing factories: 75 Total installed capacity: 2, 35, 000 m. tons of DRC Production 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 201213.

GROWTH AND CURRENT STATUS OF INDIAN LATEX INDUSTRY : Qty (Mt) Production Consumption Import Export Capacity 2011 -12 76490 73190 1775 15127 216000 2012 -13 p 73150 76705 63 7052 235000 2013 -14 p 68000 77500 2378 1318 235000 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

DEMAND SUPPLY OF LATEX FOR THE NEXT 10 YEARS 2012 -13 2011 -12 2010 -11 2009 -10 2008 -09 2007 -08 Production (Tonnes) 73, 150 76, 490 76, 065 85, 760 88, 070 88, 305 Consumption 76, 705 73, 190 77, 380 82, 515 80, 520 77, 715 (Tonnes) Closing stock (Tonnes) 21, 760 17, 285 13, 945 13, 435 11, 385 13, 285 The domestic consumption pattern of Latex during the last five years shows a mixed picture with slight improved consumption in 2013 -14 2014 -15 2015 -16 2016 -17 2017 -18 2019 -19 Production (Tonnes) 68, 000 72, 080 79, 288 87, 217 95, 940 105, 530 Consumption (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 IMPORT OF LATEX (Mt) 2011 -12 1775 2012 -13 p 63 2013 -14 p 2378 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.

MISUSE OF ADVANCE IMPORT LICENSES 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. 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.

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