India is likely to face a severe supply crunch of natural rubber, which reported a 33 per cent drop in production during January 2015 — the highest ever monthly decrease in recent times. Experts warn that the domestic market will be in trouble as the lean season is on the anvil.
With the demand-supply gap being 300,000 tonnes at present, it might cross 400,000 tonnes by March, the only alternative to the supply crunch seems to be import.
In January this year, the monthly output was only 60,000 tonnes against 89,000 tonnes in January 2014. A drop in production had a cumulative effect this financial year as April 2014 recorded a 3.8 per cent decrease.
Stoppage of tapping in most plantations across Kerala and farmers shifting to other crops are the main reasons attributed to the fall in production of natural rubber.
According to the current trend, total annual output in 2014-15 will be confined to 650,000 tonnes. During 2013-14, total production was 844,000 tonnes and in the preceding financial year, it was 913,700 tonnes. According to the earlier estimates of Rubber Board, this financial year’s turnout should be 800,000 tonnes.
However, experts say the actual figure is likely to be much lower at 650,000 tonnes. This situation makes India depend more on imports as consumption increases every month. In January 2015, consumption rose 0.6 per cent to 84,000 tonnes. In future, India could face a serious problem as far as natural rubber is concerned, because plantations across Kerala are on an abandoned stage.
During the April-January period of the current financial year, import increased 14 per cent to 359,857 tonnes against 315,049 tonnes in the same period of the last financial year. Total import is likely to cross 400,000 tonnes this year, which will be the highest ever import to the country. Total import in 2013-14 was 325,190 tonnes according to Rubber Board data. India is likely to consume one million tonnes of natural rubber in this financial year, according to the current trends in production. This means, about 40 per cent of India’s requirement is met through import, which is an alarming situation as far as rubber growers are concerned. More dependence on import will deepen the crisis in local trade and production. In the long run, India might be far behind Thailand, Indonesia, Vietnam and Malaysia, falling to fifth or sixth spot, according to experts.