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| Less tapping may make NR more expensive |
| George Joseph / Kochi Jun 16, 2010, 00:20 IST |
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Storms and heavy rain in the last one week have brought tapping of rubber trees to a standstill in most parts of Kerala, paving the way for a further rise in prices.
In some parts of central Kerala, rain had damaged plantations and uprooted rubber trees, growers said. Since production was badly affected, the local market was bullish, with the price of benchmark grade RSS-4 rising to Rs 170 a kg.
The market is poised for a further rise in prices as growers are not releasing stocks in anticipation of a further rise. This has created a serious supply crunch. Even consumer industries are finding it difficult to procure rubber.
Both local and international prices have risen around 100 per cent in a year. In June 2009, the local market quoted Rs 99 for RSS-4 while the Bangkok market quoted Rs 82. Today, Bangkok quoted Rs 165 a kg.
According to producers in Kerala, production would be less by three-five per cent this month owing to loss of tapping days, as against a 2.9 per cent increase in the April-May period. In June 2009, production was 54,255 tonnes, as against 62,200 tonnes in June 2008. This time, monthly production is estimated around 52,000 tonnes.
The estimated fall in production in June will put pressure on supplies, which may lead to a sharp rise in prices. In April-June of last financial year, production declined 11.3 per cent to 159,325 tonnes.
A steady increase in consumption in the country is upsetting the market’s demand-supply equilibrium, a major factor behind the price surge. In the first quarter of 2009-10, consumption rose 1.7 per cent to 218,940 tonnes, as against a 11.3 per cent fall in production. The supply-demand gap is widening further.
In April and May this year, while production saw a 2.9 per cent increase, consumption rose 9.5 per cent. According to estimates, there is a gap of more than 100,000 tonnes annually in production and consumption of natural rubber in the country. This is likely to increase to 150,000 tonnes this financial year. So, the ongoing heavy rain in June may add to the worries of the rubber-consuming industries.
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