KOCHI: India’s natural rubber production and consumption will fall short of Rubber Board’s projections for 2012-13. Scanty rains have reduced production while declining automobile sales have dragged down consumption.
For the eleven months ended February 2013, production showed a marginal rise of 0.3% at 8,51,200 tonne year on year. Consumption was only slightly better reaching 8,90,060 tonne, an uptick of 0.9% during the period. Rubber Board had projected a production of 9.2 lakh tonne and a consumption of 9.7 lakh tonne for the year.
“Tapping has been stopped in most places because of hot weather. Production in March could be under 60,000 tonne. The target is unlikely to be reached,” said Biju John, a dealer. Production fell by 4.7% at 61,000 tonne in February 2013.
Consumption was leading production during the early months of the year but lost pace since October. In February alone, consumption fell by over 8% to 73,000 tonne. It could be no different in March as auto sales have been going through a bad patch. However, production could be nearer to the last year’s 9,03,700 tonne. But growers express doubts whether consumption will touch 9,64,415 tonne reached last year. “Since it is yearend, there is not much buying happening now. Demand is muted,” said a major grower.
The growth in the import of natural rubber has come down with demand showing no improvement and the difference between global and Indian prices narrowing down. Last year, imports peaked to 2.05 lakh tonne. This time, there was speculation that it could go up further by 20,000 to 25,000 tonne as imports were growing by 20% to 30% in 2012.
The tyre industry bought rubber from overseas taking advantage of lower global prices to supplement the stock as domestic production was not sufficient. But the decline started in January and worsened in February when imports have plunged by over 60% to 9,497 tonne.
It could be still less in March as a government proposal to increase import duty by 14 to 34 per kg has affected the sentiment. At the end of February 2013, total stock available in the country was 2.7 lakh tonne.
Theo India Times
