India hit by low natural rubber output

April 9, 2018

rubberDespite rising consumption, Indian natural rubber production is likely to be 1 lakh tonnes short of the Rubber Board projected figure of 8 lakh tonnes for 2017-18.

For 11 months to February 2018, the production clocked 6.49 lakh tonnes, just 2 % higher from a year earlier. At the same time, the consumption for the period has crossed 1 million tonnes at 1,003,060 tonnes.

In 2016-17 the output stood at 6.91 lakh tonnes and the consumption at 1,044,075 tonnes. “There is not much interest in tapping with the prices remaining in the lower range. With a fall in production, the deficit has widened to almost 4 lakh tonnes which is being met through imports,’’ said leading rubber merchant N Radhakrishnan.

The import has been increasing in the last three years in tandem with the decline in production. The highest import at 458,374 tonnes happened in 2015-16 when the output plunged to 5.62 lakh tonnes, the lowest in the recent times. This fiscal, till February, the imports are up by nearly 5 % at 418,944 tonnes from a year ago. It is expected to reach near 4.50 lakh tonnes for the year.

“If the prices continue to remain low, then in future the dependency on import may go up to 60 or 70 %,’’ Radhakrishnan said.

The prices have remained in the range of Rs 120 to 130 per kg for most of the months. The RSS-4 variety used by the tyre industry ruled at Rs 122 per kg on Saturday, Rs 11 higher than the international price for the similar variety.

“Though it is lean season now, we expect the prices to remain in the Ra 120-125 per kg range as the demand is quite sluggish,’’ said G P Goyal president of Cochin Rubber Merchants Association. The lower global price has led to more imports by the consuming industry despite an import duty of 27.5 %.

The lower prices, the delay in getting money under the price support scheme of Kerala government, which promises Rs 150 per kg to small growers and irregular rains, have been attributed as the causes for stagnant production. The average price was better at 135.49 per kg in 2016-17.

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Rubber Prices
(Last Updated: 08 Oct 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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