2017 year in review: sad news for the Indian rubber market

January 4, 2018

rubberThe year 2017 saw several disappointments. Industry troubles such as price crash and production loss due to climate change continued to haunt the 10-lakh odd growers especially in the small and medium segment.

Prices hovered at  120-130/kg for the RSS-4 grade, making rubber an increasingly unviable option and prompting many farmers to switch to more remunerative crops such as cocoa or cashew.

“In fact, the un-remunerative prices have put the majority of the growers in dire straits, forcing them either to abandon tapping or utilise the land for other purposes. There has been an output drop of 25 % even though the period between October and December is considered the peak production time,” said Shajimon Jose of Chirakkadavu Rubber Producers Society, Kottayam.

“With such low prices, it is difficult for growers to come back to production activities as most plantations require manuring, weeding, etc., before tapping gains momentum,” he said.

The stock availability in the market was limited, as growers held back in anticipation of better prices for 2018. This even affected centrifuged rubber production due to unavailability of latex.

Price volatility

Rubber Board officials point out that the prices improved from November 2016 owing to a host of factors including the rise in crude price, improved US economic outlook, and supply concerns due to floods in Thailand. However, international and domestic prices have been trending low from April this year. July witnessed a recovery, with domestic prices crossing ?140/kg but they retreated towards the month end. Thereafter, domestic prices moved sideways with some degree of volatility.

The uptrend in production continued with 5.7 % growth during April-August over the corresponding period of last year. The projected production in 2017-18 is 8 lakh tonnes — a growth of 16 % over last year, the officials said, adding that the initiatives to enhance productivity and bring more area under tapping are on.

According to PC Cyriac, President, Indian Farmers Movement (Infam), growers were left in the lurch in the wake of their protest against the discriminatory attitude of the government. The government, according to him, has not only not levied safeguard duty on tyre companies for imports but has actually given them anti-dumping duty benefits.

The only hope for farmers is the incentive scheme announced by the Kerala government at ?150/kg even though it is yet to gain momentum due to cash crunch, he added.

Tackling climate change

According to the scientific community, the temperature is already at the end of the upper threshold in Kerala and the rising temperature in growing areas is harmful to the crop and is affecting the yield. “Every new summer is hotter than the previous season,” remarked an official in the research community.

The Board is, therefore, focussing on climate-resilient clones on which research has already started. Besides, there is a need for evolving a new kind of agro-based home-stead system of inter-cropping or mixed cropping that will give a comfort level for changes in climatic conditions.

 

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Rubber Prices
(Last Updated: 17 Dec 2018)

Monthly The prices shown above do not include VAT @4% on purchase and expenses towards packing, transportation, warehousing  and other incidentals


Source: Latex India

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