Sheet rubber prices drop in India while production rises

sheetSheet rubber prices have fallen 5% in November so far following an increase in production amid slowing demand.

On Wednesday, the RSS-4 variety, used in tyre manufacturing, was priced at Rs119 per kg.

“In October, our production should be close to that in the same period last year,” said Sabu P Idicula, rubber production commissioner at Rubber Board.

In October 2017, India produced 62,000 tonnes of sheet rubber. Tapping has been on the rise in Kerala, the top-producing state, since September following the rains. Trees have started growing leaves after suffering a heavy fall in the monsoon months. The worst loss happened in August, when heavy rains and flood ravaged the state.

“There is a chance that the tapping season may get prolonged this year,” said Idicula.

Peak tapping season usually ends by the middle of January. The annual target is 700,000 tonnes, but the board expects that production will reach around 600,000 tonnes this year. Last year, the output was 694,000 tonnes.

Domestic prices are currently unstable in the international market, where excessive supply and sluggish demand from China have driven the prices down. Tyre companies have been resorting to massive imports, capitalising on lower international prices. Block rubber, which is mostly bought by the tyre industry from overseas, is available at Rs88 per kg now.