India’s import of natural rubber is likely to rise a steep 21% to surpass the $1 billion mark for the first time during the current financial year on widening production and consumption deficit.
Data compiled by the industry body The Associated Chambers of Commerce and Industry of India (Assocham) indicate India’s natural rubber import to hit $1107 million during the current financial year from $906.4 million in the previous year.
Rising import of natural rubber, a key raw material for tyre manufacturing, poses a big threat for Indian user industry as the move would create more uncertainty in terms of prices and, therefore, affect long term business planning. Also, India’s dependence on import would proportionally increase.
“The most worrying factor is the ever-widening gap between production and consumption in India which is growing at a compounded annual growth rate (CAGR) of whopping 69% as it crossed 59,000 tonnes mark in 2012-13 as against about a mere 7,200 tonnes in 2008-09,” said D S Rawat, Secretary General of Assocham.
The apex trade body the Rubber Board reported natural rubber production at 844,000 tonnes in the financial year 2013-14, a decline of 7.6% from the previous year. By contrast, consumption of natural rubber, the Board said, jumped marginally to 977,400 tonnes during 2013-14 compared with 981,520 tonnes in the previous year. Thus, the overall deficit in India shot up to 137,520 tonnes in 2013-14 as compared to 59,000 tonnes in the previous year.
| Natural rubber – Value of India’s imports ($ million) | |||||
| Country | 2010-11 | 2011-12 | 2012-13 | 2013-14 | Share (%) in 2013-14 |
| Indonesia | 283.9 | 288.8 | 371.8 | 392.8 | 43.3 |
| Thailand | 170.7 | 352.7 | 165.2 | 234 | 25.8 |
| Vietnam SOC REP | 71.3 | 113.2 | 203.7 | 200 | 22.1 |
| Malaysia | 36 | 54.5 | 26 | 24.9 | 2.7 |
| COTE D’ Ivoire | 19.7 | 19.8 | 25.6 | 24.5 | 2.7 |
| Top 5 | 581.5 | 829 | 792.3 | 876.2 | 96.7 |
| Total | 640.8 | 883.8 | 842.2 | 906.4 | 100 |
| Source : Assocham | |||||
Considering the production to achieve the CAGR growth of 1.4%, total natural rubber output is likely to reach 939,340 tonnes during the current financial year i.e. 2014-15. Similarly, with an estimated 2.8% CAGR, its consumption is estimated at 1027,503 tonnes in the current financial year.Assocham forecast India’s deficit at 88,163 tonnes in the financial year 2014-15.
“The demand-supply gap is further expected to increase steadily by about 20% while taking into account the expected growth of automobile, footwear and other sectors consuming natural rubber. It is imperative for India to immediately address the issue of rising natural rubber imports by augmenting domestic production of natural rubber,” said Rawat.
Increase in domestic prices due to shortage of domestically available natural rubber during the peak season owing to fall in production is a point of concern for downstream industries as natural rubber is the main raw material for them. In such a situation, the industry has no option but to look at alternative sources of raw material from abroad as international prices might be lower than domestic ones.
Industry sources, therefore, demanded immediate correction in the inverted duty structure in addition to offering government-owned waste lands for rubber plantation on a long-term lease. Ensuring easier availability of finance, increased government policy support and institutional interventions, promotion of farmer-producer societies functioning as self-help groups and empowering farmers economically to bolster natural rubber production and gradually reduce the growing reliance on its imports, said an official with a leading tyre manufacturing company.
– Business Standard
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