Commodity Online reports, “As Indians buy more cars the global price of Rubber is likely to see a revival. The tire makers’ rising demand for natural rubber may boost imports. Analysts say the lower international prices and rising demand could shoot up the imports to 400,000 metric tons this year. The latest trend indicates Indians are buying more cars and this makes the tire makers, the biggest consumers of natural rubber, upbeat.
India car sales grew for the third month in succession in July and are expected to rise between 5 and 10 percent this fiscal year, according to the Society of Indian Automobile Manufacturers. The decline in global prices of rubber may be attributed to the weak economic growth in top consumer China and oversupply in the top Southeast Asian producers, Thailand and Indonesia. Meanwhile, Indian farmers have been raising their voice to curb the imports of rubber.
The free fall in prices, due to the high volumes of import, is pushing the rubber farmers into a deep financial crisis. According to the latest data of the Rubber Board, during the April-July period India imported 133,789 metric tons of rubber. This was 90,580 metric tons in the same period of fiscal year 2014. In July, the imports were 36,997 metric tons. India imports most of its natural rubber from Thailand, Malaysia, Indonesia and Vietnam.
The monthly rubber prices have declined from Rs 13,400 to Rs 13,100, Rubber Board data show. The rubber prices declined on Wednesday due to the absence of buyers and the sharp declines in the domestic and international trendsetters kept the commodity under pressure during late trading hours. Sheet rubber dropped to Rs 130.50 (Rs 132) a kg, according to traders. The grade dropped to Rs 131 (Rs 132.50) and Rs 128 (Rs 129.50) respectively, according to the Rubber Board and dealers.