The Economic Times reports Indian natural rubber production is likely to be 1 lakh metric tons short of the Rubber Board projected figure of 8 lakh metric tons for 2017-18, even as the consumption is set to reach a new peak. For 11 months to February 2018, the production clocked 6.49 lakh metric tons, just 2 percent higher from a year earlier.
At the same time, the consumption for the period has already crossed 1 million metric tons at 1,003,060 metric tons. In 2016-17, the output stood at 6.91 lakh metric tons, and the consumption at 1,044,075 metric tons. “There is not much interest in tapping with the prices remaining in the lower range. With a fall in production, the deficit has widened to almost 4 lakh metric tons which are being met through imports,” said leading rubber merchant N. Radhakrishnan.
The import has been increasing in the last three years in tandem with the decline in production. The highest import at 458,374 metric tons happened in 2015-16 when the output plunged to 5.62 lakh metric tons, the lowest in the recent times. This fiscal year, until February, the imports are up by nearly 5 percent at 418,944 metric tons from a year ago. It is expected to reach near 4.50 lakh metric tons for the year. “If the prices continue to remain low, then in the future, the dependency on imports may go up to 60 or 70 percent,” Radhakrishnan said.
The prices have remained in the range of Rs 120 to 130 per kg for most of the months. The RSS-4 variety used by the tire industry ruled at Rs 122 per kg on Saturday, Rs 11 higher than the international price for the similar variety. “Though it is lean season now, we expect the prices to remain in the Ra 120-125 per kg range as the demand is quite sluggish,” said G.P. Goyal president of Cochin Rubber Merchants Association. The lower global price has led to more imports by the consuming industry, despite an import duty of 27.5 percent.
Source: Global Rubber Market