KOCHI,INDIA(Commodity Online): Rubber farmers in India are upset over the slump in crude oil prices which reduced the synthetic rubber prices. The farmers are now turning to other crops like cocoa.
As Synthetic rubber is made from petroleum products, cheaper crude prices have a direct impact on its prices. When buyers opt for cheaper synthetic rubber, demand for natural rubber will be hurt.
Crude oil prices plunged below $75 for the first time in more than four years last week on expectations of higher production in the U.S.
Farmers switching to Cocoa
In India, rubber prices have fallen by 24% in the last 12 months to 118 rupees per kilogram. The drop in prices has prompted farmers to abandon tapping and switch to other commodities.
Farmers in the southern state Kerala are switching to cocoa eying the rise in the price of the commodity. The outbreak of Ebola has resulted in the surge in prices.
As per media reports, Kerala supplied 6,800 metric tonnes of cocoa beans last year. This year, the production has touched 5,000 metric tonnes, so far.
India is the world’s fifth largest producer of rubber. The state-run Rubber Board has said the country’s October natural rubber imports increased 27.7 per cent from a year ago to 36,865 tonnes. The surge in imports is mainly as a result of increased overseas purchases made by tyre makers due to a drop in domestic production. Higher imports are the main reason that hurts the prospects of the farmers.
In the spot market on Monday RSS 4 declined to Rs. 117.00 (118.00) per kg according to traders. The grade weakened to Rs. 117.50 (118.00) and Rs. 114.50 (115.00) per kg respectively as reported by the Rubber Board and dealers.
– Commodity Online