Natural rubber import was up 80% during April – May period, compared to the same period in 2013-14 as per the latest figures of the Rubber Board. 63,559 tones were brought in during the couple of months, compared to 35,344 tones. However, India’s export had a pathetic show and it dropped 98%, down to just 40 tones, compared to 1723 tones in April – May period of 2013-14. Only 11 tones were exported in the month of May.
Sharp drop in the international prices of natural rubber compared to local prices is the main reason behind the rise in imports. For the last one year local prices were up by Rs 20 on an average than the prices recorded in the global markets, mainly in Bangkok market. Bangkok market, today quoted Rs 119 for a Kg while the price in Kottayam and Kochimarkets was Rs 144/Kg. The price of SMR-20, which is almost equivalent to RSS-4 grade for all practical purposes, is available at a price tag of Rs 98/Kg in Bangkok trading. So import is the natural option for the industries, especially for the tyre makers, even at remitting the import duty. So according to experts, import is likely to be 50% of the total annual production in India in the current financial year. In this financial year import is likely to cross 400,000 tones as per the current trend.
India’s import in 2013-14 was 324,467 tones while the yearly production was 844,000 tones. It was for the first time that import crossed 300,000 tones mark. This year it may set a new record crossing 400,000 tones. Natural rubber prices nose dive in the world market due to a glut visible continuously for the last four years. Weakening of global demand, especially in China, world’s largest consumer, is the main factor for the incessant fall in prices for the last 12 months.
Meanwhile, production during April and May dropped 7% at 104,000 tones compared to 112,000 tones in the same period of the previous financial year. According to Rubber Board data, consumption had a slight increase of 0.4% at 165,000 tones. This was 164,305 tones in April – May period of last FY.
According to the Board, production in 2013-14 was down 7.6% at 844,000 tones compared to 913,700 tones in last FY. This is for the first time during last ten year period natural rubber production records a dip. Earlier, the Rubber Board had scaled down the original production estimate for 2013-14, twice from 9.6 lakh tones to 8.7 lakh tones and to further down of 8.5 tones. However, even the revised estimate could not be achieved.
Against the 7.6% fall in production, during 2013-14, consumption edged up 0.5%. So the supply-demand mismatch is a serious concern as an upswing in production is not expected in this financial year too. The gap between local production and demand was 133,400 tones as per the board’s estimates. This gap may widen in the current year as production remains either static or drops, but a sharp upward swing may occur in the case of consumption.
– Business Standard