Concerns are growing over the continued shortage of natural rubber (NR) in India’s tyre industry, despite national Rubber Board estimates of 10% year-on-year increase in NR production. Already, industry insiders think rubber farmers are hoarding the commodity, as the flow of rubber into the market has not been steady; but Josch Joseph, Secretary of the Indian Rubber Growers Association (IRGA), disagrees.
Instead, Joseph said delays in payment under the main rubber-producing state of Kerala’s price incentive scheme seem to have discouraged small growers from tapping. He said most have “stayed away” from tapping as they have not received compensation for the last 6-7 months. The shortage is expected to get worse as the tapping season in Kerala comes to a close. Meanwhile, rubber yield has already started falling, inevitably pushing prices up. Sheet rubber prices, for example, have risen 2% in just a week to 137/kg.
Although consumption is generally subdued in the last quarter of the fiscal year, according to an official at India’s JK Tyres, the tyre industry will continue to import more rubber to bridge the demand-supply gap, which is expected to widen further with the coming revival of the automobile sector.