A sharp fall in local Natural rubber (NR) production has raised serious concern over its supply as the overall production till November of this financial year dropped 11% compared to the same period of last FY. This may badly affect the availability of the commodity over the next four –five months. Sheela Thomas, Rubber Board chairman told Business Standard that the total production in this fiscal would be 870,000 tones. It may go down beyond that. ‘We are assessing the production scene. Anyway it will be lower in this financial year.
Intensive rain and the widespread incidence of abnormal leaf fall are the main reasons for decline in production, she added.
Rubber Board had earlier projected a production of 960,000 tones in 2013-14 and consumption at 1,020,000 tones, with an overall annual deficit of 60,000 tones. According to growers production is likely to be dropped to 800,000 tones only as per the current trend. During 2012-13 India produced 912,200 tones of rubber registering 0.9% rise over the previous financial year. Instead 10% drop in production is almost certain in this fiscal.
Sheela said that consumption would also be lower than the earlier projection, as per the current trend. Consumption dropped 2.3% in April – November period at 648,530 tones. During November, 5% dip was recorded at 22,872 tones as against 23,968 tones in November, 2012.
As the global price tags have increased and overseas markets are not much attractive, import is a lesser option for the industry currently. This makes the condition more worse in the coming months. Though the local prices are lower and best tapping season is going on, market is still scarce, according to industry sources. This supply situation may badly hit the production line of various companies, especially in the small and medium segment.
Total production during April – November period was 517,000 tones as against 583,200 tones in the same period of last year, recording a fall of 11.4%. In November alone, production dropped 7.1 % at 91,000 tones. During this financial year except in April and May, all other months recorded a fall in production, raising serious supply crunch in the country. As the overseas prices were quiet attractive, industry opted the import route, till the end of October. But the price situation had a paradigm shift from November onwards and import is less attractive now. Except in April, June and November, import recorded a steep rise in other months of this financial year. Generally this helped the supply to be normal in the country, without affecting the production of rubber based industry. This helped the supply and demand to go almost hand in hand till October.
Data of Automotive Tyre Manufacturers Association [ATMA] indicates a serious shortfall in domestic supply and a great extend of the demand had been met through import. As the production is slowed down even in the best season of the year [October – December] local availability will be in trouble in the coming months. According to growers production would be lower in December, January, February and March also. Normally production falls during February – April due to summer. So experts see a serious supply crunch for the next four –five months period.
But Rubber Board does not foresee a serious supply problem since they project 245,000 tones of stock in the country.