Fresh supplies arrest rubber price spiral
The price rise of natural rubber has been checked now. A flood of supplies into the Kottayam and Kochi markets has reversed the price trend. The benchmark grade RSS-4 today quoted at Rs 99 a kg after touching a high of Rs 102 on Monday.
The galloping prices of natural rubber over the last 6-8 weeks had prompted growers to hoard rubber, hoping to profit from the high prices.
As summer showers are active in most of the rubber plantations, tapping is on now and the scarcity has vanished. According to growers, though the rains are rather active, the yield is much lower owing to extreme summer heat during the day.
Growers are now forced to release their stocks as the local price is higher by Rs15 per kg over the global market. Since the production of rubber is expected to be high, stocking of rubber would be non-viable.
Rubber-based industries, especially tyre manufacturers, had already warned that any further increase in prices would clear the route for cheaper imports. Production is likely to rise as there is a moderate rainfall in most plantations. The present prices are also attractive to farmers.
Meanwhile, production and consumption of natural rubber have gone hand-in-hand in 2008-09 as production touched 865,000 tonnes and consumption totalled 866,000 tonnes, according to the latest estimates of the Rubber Board. Production of NR has risen 4.8 per cent on an year-on-year basis over the 825,000 tonne recorded in 2007-08.
NR consumption has risen by only 0.5 per cent in 2008-09. India’s natural rubber consumption was 866,000 tonne against 861,000 tonne recorded in 2007-08.
A steep fall recorded on the export front in 2008-09 as 45,538 tonne were shipped against 60,353 tonne during the previous year. Imports also registered a drop of 6,367 tonne at 79,927 tonne against 86,394 tonne in 2007-08. The marginal increase in consumption and drop in exports have resulted in a sharp increase in the domestic stock of NR in the country. As on March 31 last, the total stock has been estimated at 205,000 tonne against 164,000 tonne in March, 2008.