Challenging times ahead for rubber sector

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The is not very optimistic for rubber producing and consuming sectors according to Sawar Dhanania, Chairman of the . He was delivering the presidential address at the 179th of the Rubber Board, in Kottayam.

The economy world-wide is passing through difficult times and the horizon is overcast with uncertainty adversely affecting investor sentiment and consumer confidence.

This would have an impact on all economic and industrial sectors, he said. There could be volatility in the natural rubber () market due to weather conditions, currency movements, variations, and speculative factors. However, the expectation that developing and emerging economies would recover and would be on a sustained growth path is a consoling factor, he added.

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World trends

According to the Association of Natural Rubber Producing Countries (), world NR production and consumption during the first half of 2019 amounted to 5.85 million tonnes and 6.93 million tonnes, respectively, with a deficit of 1.08 million tonnes. This was mainly due to the decrease in production in major producing countries, including Thailand, Indonesia and China.

According to IRSG, rubber production and consumption during the first half of 2019 remained almost the same as the corresponding period of last year at 7.60 million tonnes and 7.70 million tonnes, respectively. This is mainly due to the in car production and sales all over the world. Consumption of SR in 2020 is projected to grow by 1.9 per cent, the Chairman informed the Board.

Dr KN Raghavan IRS, Executive Director, Rubber Board, presented a report on current domestic status of natural rubber. NR production during April-September 2019 was 3.08 lakh tonnes with an increase of 11.2 per cent as compared to the same period last year. The improvement in production was mainly due to the efforts taken by the Board to bring more untapped areas into tapping through adoption of holdings and rainguarding.

So far, 2,800 hectares of untapped area have been brought under tapping through adoption. The total area rainguarded in 2019-20 comes to 2.5 lakh hectares with an increase of 40,000 ha compared to last year.

Vital statistics

Production in 2018-19 stood at 6.51 lakh tonnes, contracting 6.2 per cent compared to the slight positive growth of 0.4% in 2017-18. The projection of NR production for 2019-20 is revised to 7.30 lakh tonnes.

Consumption of NR decreased during April-September 2019 by 7.6 per cent as compared to the same period of the previous year. During this period, consumption of NR declined from 6,14,040 tonnes in 2018 to 5,67,120 tonnes. Consumption of NR is projected at 11,40,000 tonnes in 2019-20.

Import of NR decreased during the April-September 2019 period by 13.9 per cent as compared to the same period in the previous year and 73 per cent of the import was through the duty-paid channel.

A little over 82 per cent of import of NR during the April-September 2019 period was in the form of block rubber.

Import of NR during April- September 2019 is provisionally estimated as 2,57,943 tonnes. Projection of import of NR in 2019-20 has been revised downwards from 5 lakh tonnes to 4.15 lakh tonnes. The stock of NR at the end of September 2019 was 2.96 lakh tonnes.

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