The smart advantage on price front still tempts rubber based industries to buy natural rubber from abroad, which in turn causes a persistent crisis in local markets.
As the global price of Standard Malaysian Rubber (SMR) is currently lower by Rs 17/Kg than the domestic RSS- 4 grade, import is still viable and is on a steady increase.
In the month of October NR import increased 81 % at 33,486 tones against 18,466 tones in 2012 October. Interestingly, there is a slow down in the momentum of increase as in September 208% increase was recorded in imports. 45,581 tones were brought in during September.
This smart rise in imports turned out to be the villain causing steep fall in prices in the local market, upsetting 1 million plus growers across Kerala. Naturally, this is being reflected in the political scenario of the state as natural rubber is the main stay of some of the political parties, like Kerala Congress.
By the end of October, the cumulative seven months import has crossed 2,00,000 tones at 2,14,448 tones as against 131,107 tones in the same period of last financial year, registering an increase of 64%. Interestingly, the total annual import during 2012-13 was 217,364 tones and based on the current trend import is likely to cross 3,00,000 tones this year.
According to leading traders as the price was on a steady fall in India the gap between the local and global prices were narrowing and this caused the slow down in imports during October. The gap was in a range of Rs 30-35/Kg during August and September. As of today the price of RSS-4 grade dropped to Rs 158/Kg.
The average price in September was Rs 183 and that of August was Rs 190. So the local market now attracts local industrial users to Indian market. The slow pace in the rate of growth of imports is an indication of this, said N.Radhakrishnan, former president, Cochin Rubber Merchants Association (CRMA).
Crisis continues in production
Fall in production continued in October also at 83,000 tones as against 89,500 tones in the same month of last year, recording a drop of 7.3%. In this financial year except in April and May production recorded continuous fall, as per the data of the Rubber Board.
Total production in April – October period dropped 12.2% at 4,26,000 tones as against 4,85,200 tones. It is almost certain that the domestic annual production will be in deep crisis for the financial year 2013-14. Rubber Board chairman, Sheela Thomas said that total annual production would drop 9.4 % during this financial year.
The annual output will be 8,70,000 tones only as against 9,60,000 tones recorded in last financial year. She cited heavy monsoon and leaf falling decease for the drop in production. This loss would off set in next financial year as the tapping area is likely to be increased to 5,18,000 hactares in 2013-14 from 5,04,000 hactares in 2012-13.
Consumption also drops
Drop in consumption of NR also continued in October, Rubber Board data said. Monthly consumption in October was 80,500 tones as against 83,485 tones in last October, recording a fall of 4%. Cumulative consumption in April – October period dropped 3% at 5,69,515 tones.
Consumption had a continuous fall in the current financial year, except in April which recorded only a marginal increase. According to the latest data of the Board total stock in the country is 2,40,000 tones as against 2,45,000 tones in 2012 October, recording a fall of 5%.
Natural rubber imports (in tonnes)
|2012 April – October||2013 April – October||Increase||Full year import 2012-13|