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WTO panel to discuss Australia’s plaint against India’s sugar subsidy today
(Last Updated: 27 Nov 2018)

 

WTO panel to discuss Australia’s plaint against India’s sugar subsidy today

Canberra says its mills have been hit as the sops have caused global prices to decline

SYDNEY, NOVEMBER 25

The Agriculture Committee of the World Trade Organization (WTO) is set to discuss on Monday Australia’s allegation against India over sugar subsidies. Australia feels that such subsidies have caused significant decline in global sugar prices and were hurting its mills.

According to documents made available to the committee, Australia has communicated that it has a significant interest in ensuring a transparent and predictable global trading system, underpinned by a shared understanding of members’ obligations under WTO rules. “Under Article 18.7 of the Agreement on Agriculture (AoA), we seek further clarification from India on its domestic sugarcane and sugar policies. Historically, as the world’s second largest sugar producer and fourth largest exporter, dynamics in India’s sugar market have significant implications for both prices and trade in the global market,” it said.

“Two of our 24 mills are going to be closed as they can’t stand in such undue competition,” David Rynee, Director (Policy, Economics and Trade) of Australian Sugar Milling Council, told visiting Indian journalists here. He clarified that Australia’s move is not against sugarcane farmers but against policies. “We are very supportive of getting rid of product-based subsidies. We will prefer safety net for farmers,” he said while claiming that Brazil is likely to support Australia’s view while Thailand will be on fence. These two countries are other two big sugar producers.

Australia has already made it clear that it is ready to “engage in discussions with India and other members regarding the significance of India’s MSP (Minimum Support Price) and resulting AMS (Aggregate Measure of Support) for sugarcane, as well as the other trade distorting measures to facilitate sugar exports, and their impact on global sugar markets.”

India is estimated to produce nearly 315 lakh tonnes of sugar during 2018-19, though Australia claimed that it will become the world’s largest sugar producer in 2018-19 with approximately 340 lakh tonnes. It alleged that though cost of production is very high ($291 a tonne higher than Australia’s), there are export subsidies of nearly $150 a tonne.

Rynee said Australia produced 42 lakh tonnes of sugar in 2017, out of which 37 lakh tonnes were exported (mainly to South Korea, Japan and Indonesia). It is the third largest exporter. It has very low costs of production and it is price taken in competitive global market. He also said the Government did not provide any subsidy either to farmers or to the sugar mills. India has over 50,000 sugarcane farmers as against just 5,000 in Australia.

Surge in output

Australia alleges that the subsidies helped sugar production to surge in India and far exceeded the level of farmer assistance permitted under WTO rules. It uses the mechanism of compliant which is known as counter notification (CN) that demonstrates that the FRP (Fair and Remunerative Prices) ‘provide assistance well in excess of entitlement under the WTO Agreement on Agriculture.’ Against 10 per cent permissible, between 2011-12 and 2016-17, on average 90 per cent of the value of cane production was subsidised, Australia claimed.

According to Rynee, future discussions between the two Governments and industry will focus on six issues. These include removal of 2018-19 MIEQ (minimum indicative export quota) of 50 lakh tonnes, bringing export subsidies into line with WTO entitlements and obligations, re-divert export subsidies to assist mills store the surplus sugar, reform of FRP and SAP (States’ Administered Prices) so that they are linked to domestic and export prices.

“Every year India has a surplus, it draws out a subsidy programme,” Rynee said which means prices of export will come down. According to market sources, there has been 124 lakh tonnes of global oversupply since 2017 mainly due to Government policies and good weather. This resulted in bringing average raw sugar export price to US cents 12.65/lb as against US cents 14.5/lb in Australia.

(The correspondent is in Sydney at the invitation of the Australian Government)

 
Published on November 25, 2018

 

 

 

Kerala HC stays DGFT’s notification on pepper minimum import price

KOCHI, JULY 24

Pepper exporters, mainly value-added processors, heaved a sigh of relief when they obtained an interim stay from the Kerala High Court on the DGFT notification fixing a minimum import price on pepper at 500/kg.

Passing the order, the Court observed that only the Central Government has the power to issue notification, framing or amending the Exim policy under the Foreign Trade (Development & Regulation) Act 1992.

The court order comes in the wake of a batch of writ petitions filed by Kancor Ingredients, Synthite Industries, etc challenging that the Directorate-General of Foreign Trade has no jurisdiction to amend the policy condition by way of a notification under section 3 of the Act, as the same provides only for issuance of orders restricting imports and exports.

According to the petitioners, the MIP notification destroyed pepper imports to the country and consequently, the export of value-added products of pepper has seen a significant decline for the year 2017-18.

There has also been a sharp decline in the export of value-added products due to the imposition of MIP without which no person could import pepper.

The petitioners said that total pepper production in the country is within the range of 35-60,000 tonnes, while the domestic consumption itself is more than 50-70,000 tonnes per year. The requirement of pepper for export purpose or for other value-added products is in the range of 20,000 tonnes.

Even when the pepper production in the country has been at its maximum, it was not sufficient to meet the export requirement for the spice industry. Further the pepper available in other countries are also suited for value added products due to which imports from Sri Lanka, Vietnam, Indonesia have boosted the export of value added products such as ground spices, oleoresins, etc.

The cheap labour and surplus production in other countries has forced petitioners to depend on imports to compete in the world market.

Unless competitive pricing is provided, the domestic spice industry will be hit, they said.

 

 

 

 

Rubber farmers seek early transfer of aid

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 Subsidy under  Incentive Scheme

Rubber farmers seek early transfer of aid

 growers say they are facing crisis because of declining prices of raw . Here is a farmer at Kodenchery applying a chemical stimulant on  trees to increase the production.   | Photo Credit: S_RAMESHKURUP

The distribution of benefits under the Rubber Production Incentive Scheme of the State government to support farmers during the price fall of the commodity has come to a standstill, affecting hundreds of farmers in the rural areas of Kozhikode. The farmers say they have been waiting for the online transfer of fund for more than nine months now after submitting the bills.

  

The Rubber Producers’ Societies (RPS), functioning under the regional office of the  in various parts of the district, are clueless on the possibility of resuming the fund distribution. Farmer organisation leaders say small-scale and lower income group of farmers are the worst-hit with the poor attention of the government on the issue.

The fourth grade Ribbed Smoke Sheet (), which is produced mainly by the rubber growers across the State, is now having only ₹123 a kg in the market.

As per the subsidy schemes announced by the government, the supportive price to tide over the price fall comes around ₹150. At least ₹25 should be paid for a kilogram as subsidy to compensate their loss.

“At least ₹50,000 will have to be credited into my account if the government is processing my already submitted bills through the RPS. Though December is comparatively a high-yielding season, most of the farmers are not getting the expected quantity of latex, which will definitely push them into crisis in the days to come,” says Johnson Kulathingal, a farmer from Koombara.

He points out that the government is yet to come up with any communication on their plan to release the pending amount.

Joy Kannanchira, chairman of ‘We Farm’ hillside farmers’ club, says only a few instalments have been processed by the Left Democratic Front-led government though the farmers have raised the issue several times. “We are planning to launch a mass protest after meeting the Chief Minister with farmers’ petitions,” he adds.

Large-scale farmers say they are not even in a situation to hire labours for  and latex collection works as the price fall continues to be a big concern. Leaders of the Indian Farmers Movement and  point out that many still continue in the field as there is no other option for a steady source of income for survival.

 

Agri experts call for income security, price support for farmers


 

 
Finance Minister Arun Jaitley during a pre-Budget meeting with farm sector representatives and experts on Tuesday
PTIFinance Minister Arun Jaitley during a pre-Budget meeting with farm sector representatives and experts on Tuesday

Meet Jaitley for pre-Budget discussion

Experts from the agriculture sector have sought measures to offset the impact of inflation on crops and income security for farmers and also debated the farm loan waiver at a pre-Budget meeting with Finance Minister Arun Jaitley on Tuesday.

This was the first such meeting and the Finance Minister will meet more sectoral groups this week to get their proposals for the Union Budget 2018-19, which is likely on February 1.

As the farm sector provides employment to nearly half of the country’s total workforce, its prospects will play a crucial role in the upcoming Assembly elections as well as the 2019 general elections.

Pointing out that the median income of farmers in 2012 was just ₹1,600 per month, B Dasaratha Rami Reddy, Secretary General of the Consortium of Indian Farmers Association, said, “The farming community of India demands an Income Security Act for farmers as well as tenant and farm labour.”

Ashok Gulati, former Chairman of the Commission of Agricultural Costs and Prices, said that structural reforms in agriculture should be addressed rather than farm loan waivers.

He also called for buffer stocking of those commodities whose prices are trading below their minimum support price to control food inflation.

“In the last three years agricultural growth has fallen below 3 per cent. Some commodity prices have gone below minimum selling price,” he said.

Ajay Vir Jakhar, Chairman, Bharat Krishak Samaj, said that a minimum price must be set for all crops such as onions and tomatoes where the Central government intervenes to reduce prices of food.

“Make budgetary allocations to set up the ‘Farmers’ Income Commission’ for securing ‘income security’ on the lines of the Seventh Pay Commission,” he said.

Underlining the Prime Minister’s plan to double farmers’ income in the next five years, Y Sivaji, an agriculture expert and a former Member of Parliament, said the government should announce MSPs for more agricultural products and they should be linked to the inflation in input costs.

He also called for a “national policy” on loan waivers to farmers and providing them social security benefits like pension.

Experts also demanded removal of the Essential Commodities Act, including all agriculture inputs and equipment under zero per cent under the Goods and Services Tax and effective implementation of crop insurance and irrigation projects.

Finance Secretary Hasmukh Adhia, Chief Economic Adviser Arvind Subramanian, Expenditure Secretary AN Jha and Financial Services Secretary Rajiv Kumar also attended the meeting.

 

 (To be published In the Gazette of India Extraordinary Part-II Section-3, Sub-Section (ii)) Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Foreign Trade Notification No. 33 /2015-2020 New Delhi, Dated the 21st January, 2016 Graham Replica Watches Subject: Amendment in Paragraph 4.18 of the Foreign Trade Policy 2015-20. S.O. (E) In exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) read with Para 1.02 of the Foreign Trade Policy, 2015-2020, the Central Government hereby amends the following provisions of FTP 2015- 20:- 2.

The following sub paragraph is inserted in para 4.18 of FTP 2015-2020 : 4.18 Importability / Exportability of items that are Prohibited / Restricted / STE (vi) Import of Natural Rubber will not be allowed during the period 21st January 2016 to 31st March 2016 under Advance Authorisations to be issued or revalidated on or after 21st January, 2016. 3. Effect of this Notification: Facility for import of Natural Rubber under Advance Authorisations issued or revalidated on or after 21.01.2016 will not available with immediate effect up to 31.03.2016. (Anup Wadhawan) Director General of Foreign Trade E-mail: dgft@nic.in (Issued from F. No. 01/94/180/352/AM13/PC-4)

http://www.indiannaturalrubber.com/circulars/NotificationFT21012016.pdf

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http://www.indiannaturalrubber.com/circulars/amendmentimportpolicy20012016.pdf

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(To be published in the Gazette of India Extraordinary Part-I, Section-I)

Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Foreign Trade

Public Notice No. 81 (RE-2013)/2009-2014 New Delhi, Dated the 09th January, 2015

Sub: Amendment in Appendix – 30 A relating to Export Obligation Period under Advance Authorization/DFIA Schemes.

In exercise of powers conferred under Para 2.4 of the Foreign Trade Policy, 2009-14, the Director General of Foreign Trade hereby makes the following amendments in the Appendix 30A of the Handbook of Procedures (Vol.1), 2009- 14:- 2.

Following Entry is added in the table of Appendix 30A related to “Export Obligation Period for specified inputs” with immediate effect:-

Sl. No. Import Item(s) Export Obligation Period from the date of clearance of each import consignment by Customs authority 7) Natural Rubber 6 months 3.

Effect of this Public Notice: Export obligation period has been reduced to six months from the date of clearance of each consignment by customs authority, wherever Natural Rubber is allowed as an input under Advance Authorisation / DFIA Schemes. (Pravir Kumar) Director General of Foreign Trade E-mail: dgft@nic.in (Issued from F. No. 01/94/180/352/AM13/PC-4)

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New formula to help rubber growers in Kerala

The Kerala government today approved a  formula to help rubber farmers after holding discussions omega replica watches with 12  tyre manufacturing companies in the country.
Talking to reporters after cabinet meeting, Chief Minister  Oommen Chandy said as per the formula, companies would purchase  natural rubber from dealers and agents at a price fixed by  Rubber Board considering the international price of natural  rubber plus 20 per cent customs duty and five per cent purchase  tax.
State Chief Secretary Bharat Bhushan and Rubber Board  Chairman Jayathilak would monitor the progress of the scheme, he  said.
Besides Chandy, Fiance Minister K M Mani and Industries  Minster P K Kunhalikuty were among those attended the meeting.
 Meeting with tyre manufactures were called in the wake of  serious financial crisis being faced by rubber farmers in the  state due to sharp fall in the price of natural rubber.

(PTI)

 

 

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Tyre cos fall on decision to buy rubber at 25% higher price

 

Shares of tyre companies like  ,  Ceat and   are under pressure as they have agreed to procure rubber from the domestic market at 25 percent higher price over international price to aid the fund-staved sector in Kerala. Analyst say margin expansion for tyre companies will be capped.

According to an agreement, worked out in an meeting with Kerala chief minister Oommen Chandy, tyre companies will buy rubber from local market with 20 percent customs duty and 5 percent purchase tax, over the international price from local dealers.

The government will refund 50 percent of the purchase tax to the companies while the rest will also be disbursed as refund claim on collected from the buyers.

The scheme is effective till March 31, 2015. Decline in has been a grave concern for the state and a further fall to 115 per kg led to a crisis call.  In 2009, rubber price was at 245 a kg.

 

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India’s tyre makers meet government to talk rubber prices

 

Regional government ministers in India met with tyre makers on 18 December to discuss rubber prices. Chief minister of the state of Kerala, Oomen Chandy has chaired a meeting which proposed a minimum guaranteed price for rubber growers – a price of around 125 to 130 (£1.25 to £1.30) per kilogramme was suggested. In recent times the price paid to Indian rubber growers has dipped as low as 90 per kilogramme, a price considered unsustainable.

Meeting attendees included Raghupathi Singhania (JK Tyre), Ashwani Maheswari, (Birla ), Anant Goenka (CEAT), K M Mammen, (), Rajeev Anand ( India), Ajay Sevekari (Bridgestone India), P Vijayaraghavan, (TVS Srichakra) and Benoit Henry (Continental India).

 

Consumption of natural rubber is on the way up in India. The Indian government’s Rubber Board reported that in November, consumption rose almost 12 per cent year-on-year to 85,000 tonnes. Import tonnage grew at an even faster rate, jumping 19 per cent year-on-year to 33,156 tonnes. Domestic production, on the other hand, fell by around a quarter, to 64,000 tonnes, as falling prices prompted some farmers to skip tapping.

- tyrepress.com

 

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Rubber growers abandon plantations, output falls 25% in November

 

January is the peak season for production in , but this time monthly output in November was badly hit in the aftermath of a deep crisis in the market.

As the local market recorded only 114 for a kg of RSS-4 grade rubber, there is 25% fall in production in November, according to estimates by Rubber Board.

The production was just 6,400 tones against 85,300 tones in the same month of 2013. If the trend continued, India will see steep fall in production during 2014-15, creating fresh crisis in the supply side.

Total yearly output may fall 10-12 % in full year and may initiate a multiplier effect in the market as tyre majors will depend more on import as overseas markets are cheaper.

Experts say this could deepen the crisis further in the local market as there would be steep fall in prices and may lead to growers abandoning rubber plantations.

Benny Kuriakose, a local farmer told Business Standard that a major chunk of growers, mainly small and medium holders, had stopped tapping for the past couple of years and plan to dismantle the plantations.

“The average daily expense comes to the tune of Rs 1,200 -1,500 per acre and wages and earnings are too low. So it is advisable not to tap the plantations that means sharp fall in production for the last six months.”

 He added, “The crisis might intensify further as government’s initiatives like procurement have failed miserably. Farmers have no way but to abandon the farms.”

To cap the climax consumption increased 12% in November at 85,000 tones and import had a jump of 19 % at 33,156 tones. This creates a paradox in natural as the dependence on import will be a critical factor for the rubber based industries in India in future. Overall in April – November period import increased 15 % at 298,490 tones.

As the growers abandon plantations India will have to depend on South East for rubber. This, in long run, will affect the supply side and the prices as India will turn out to be a net importer of rubber. So the current situation endangers not only the very existence of one million plus farmers, but the availability of rubber in India in the future.

- Business Standard

 

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In a tit-for-tat, rubber growers plan to import tyres

V Sajeev Kumar

Comment   ·   print   ·   T+  
 
 
 
 
 
 

Rubber growers are contemplating to boycott products of domestic tyre companies and instead go for cheaper import tyres, the same way by which the industry imports raw materials.

A move in this direction is being planned in the wake of continuous fall in prices and growers, therefore, urged the industry to purchase rubber from the domestic market, Sibi J Monippally, President of the Indian Rubber Growers Association (IRGA), said.

Riding on cheap rubber imports, all tyre companies have been generating profits in each quarter. It is time that these companies introspect and came forward to support growers by buying from the domestic market at the landed cost of imported rubber, he added.

Quoting the bill of entry of imports, he pointed out that the landed cost of imported rubber is in the range of ₹135/140 per kg, whereas the domestic prices are ruling at ₹115.

At a time when the international prices were higher than domestic prices, growers agreed to lower the import duty to help the industry to sustain and thrive. Today, the growing community is getting completely disillusioned by price decline and are even thinking of stopping production or moving out of the rubber value chain, he said.

The price, he said, fall may also affect the Centre’s plan to extend rubber cultivation for the development of several Naxal-affected areas.

The growers association comprising UPASI, APK, IRGA, etc have filed a petition under the Provisions of Safeguard before the Directorate of Safeguards, New Delhi to protect the domestic rubber growers from un-controlled and unrestricted imports, which is hitting hard the domestic growing sector.

The Association urged the government to immediately increase the import duty to 25 per cent as an emergency measure. The Kerala government should also facilitate more uptake of rubber from the State to improve prices by way of tax concessions and explore the possibility of rubberisation of 20 per cent of roads every year.

(This article was published on December 15, 2014)

 

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‘Support rubber growers by way of direct subsidises’

V Sajeev Kumar

Comment   ·   print   ·   T+  
 
 
Mohinder Gupta, President, All India Rubber Industries Association
Mohinder Gupta, President, All India Rubber Industries Association

No other country has penalised consumers by hiking duties or imposing restrictions

Ever since prices of natural rubber started falling, rubber producers have been demanding curbs on import.

The Government, too, went ahead and increased the import duty by ₹10 per kg.

Demand from growers for further hike in import duties continues.

As the Government gears up for a National Rubber Policy, Mohinder Gupta, President, All India Rubber Industries Association (AIRIA), speaks to BusinessLine on the vexed issue of rubber imports. Edited excerpts:

How do you view the demand to curb rubber imports?

 

Any decision on rubber imports should be an outcome of a well thought-out policy rather than a knee-jerk reaction.

The gap between rubber production and consumption in India is widening.

Imports are inevitable to sustain rubber products’ manufacturing in the country.

Yet, import duties on rubber in India are one of the highest in the world. The industry is, in fact, suffering from inverted duty.

Despite domestic deficit, rubber is subjected to 20 per cent duty while finished rubber goods can be imported at less than half of that duty.

Any further curbs on import of rubber will make Indian manufacturing highly uncompetitive.

The National Rubber Policy is in the offing and we are hopeful it will take a holistic view of the rubber sector.

Don’t you think the industry needs to take into account the plight of rubber growers as well?

 

Against the popular perception, we are all for a vibrant plantation sector and would welcome any move by the Government to support the planters.

However, it should not be at the cost of the manufacturing sector.

In the global market, we are in competition with China and other rubber products manufacturing countries.

While they are able to access raw material cheaply, we are being subjected to barriers such as high import duties.

That makes it an uneven playing field for us and Indian industry’s competitiveness is being affected.

On the allegation that rubber prices have fallen due to imports?

 

The fall in prices is linked to softening of commodities globally. However, Indian rubber prices have continued to rule higher than international prices.

In each of the first seven months of current fiscal, the average price of domestic rubber (RSS 4) was higher than comparable prices in Kuala Lumpur and Bangkok.

Growers believe that with softening of rubber prices, industry is making profits at their cost?

 

The industry has witnessed a harrowing phase following spiralling rise in rubber prices in the not-so-distant past. As SMEs operate on a thin margin, a sudden and unprecedented rise in rubber prices hurt the industry gravely.

Now that rubber prices have come down from their peak levels, there is no room for complacency.

The threat of cheaper import of finished rubber products is growing. India’s trade deficit in rubber products (non-tyre) with some of the key trading partners has gone up substantially.

As a matter of fact, many of the rubber producing countries are going up the value chain by producing and exporting rubber products instead of raw material.

Will the Government’s plan to hike import duty on block rubber from 20 per cent to 25 per cent help lift the rubber price?

 

Any increase in customs duty on block rubber will be a retrograde step having far-reaching adverse and irreversible consequences for rubber consumers.

The Kerala government is already charging five per cent Purchase Tax on rubber and block rubber.

If the Union and Kerala State governments wish to support growers, it should be done directly by way of a subsidy to them as has been done by other major rubber producing countries such as Thailand, Malaysia, Indonesia, Sri Lanka. 

No other country has penalised or affected their respective rubber consuming interests by hiking duties or imposing any other restrictions.

What is your view on Indian block rubber industry?

 

The block rubber industry has got the capacity to fulfil the demand for block rubber in India.

However, severe shortage of good quality raw material is preventing the industry from making the required quantity.

During the current year more than 28 factories are lying closed for want of raw material and factories which are continuing to produce are able to utilise not more than 40 per cent of their capacity.

Block rubber is preferred over sheet rubber by producers and consumers.

However, the Centre has disallowed the block rubber industry from importing its raw material.

The Indian Block Rubber industry which was developed by the Rubber Board is coming to a slow but sure end.

(This article was published on December 9, 2014)

 

 

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India: Expert Group on Rubber Data Set Up

 

KOCHI: The prolonged conflict between growers and tyre manufactures on the actual production and consumption figures has forced  the to set up an expert group to address the issue.

The members of the group will be Rubber Board Chairman, representatives from Indian Statistical Institute, Indian Council of Agricultural Research and Kerala Agricultural