Small rubber growers, who are the majority of the producers in India, have not gone for tapping despite the recent increases in prices, forcing the local tyre industry to step up its imports to meet increasing demands.
“Though the prices are above Rs140 per kg, not many small growers are tapping by installing rain guards. The big estates may be forced to do that as they have to pay wages to employees,” said PM Thomas, former managing director of Pala Rubber Marketing Cooperative Society. “A new price incentive scheme by the new state government may encourage more tapping,” he said.
This year’s April-May rubber output of 85,000 tonnes is the same as that of a year ago, although May saw a 2.2% increase, as per Rubber Board data. The tyre industry indicated that it may have to increase reliance on imports. According to Ashish Pandey, vice-president-materials at JK Tyres, it has become extremely difficult for them to meet their daily requirement in the last couple of weeks due to the tight supply in the domestic market.
April-May also saw a 6% decrease in the import of natural rubber from a year ago to 69,995 tonnes. But industry executives said they expect imports to go up in the coming months, especially since the block rubber price in the international market is more than Rs50 cheaper than the RSS-4 variety in India. The previous Congress-led government had successfully implemented a Rs3 billion price support scheme for small growers, helping them get a price of Rs150 per kg when the prices had gone down below Rs100 per kg.
Meanwhile, the Association of Natural Rubber Producing Countries (ANRPC) including India fell 0.7% in the six months ended June. It is expected to look up in the second half, with the supply expected at 11.157 million tonnes, 1% more than that in 2015, the association said. Consumption too is expected to improve, it said.