Natural rubber production up 8.5% in April-August

The production of natural rubber (NR) increased sharply in April-August as against a fall in consumption. Production increased 8.5 per cent, while consumption was up 3.4 per cent.

Total output increased to 297,750 tonnes as against 274,325 tonnes in April-August 2009. Consumption increased to 390,350 tonnes as against 377,600 tonnes in the year-ago period.

The Rubber Board said the rise in production was due to increased use of rain guards in plantations, favourable weather and higher prices. The rise in production, coupled with the announcement of import of 25,000 tonnes at lower duty, is leading to a sharp fall in prices. The RSS-4 grade was today quoted at Rs 165 a kg. It was Rs 185 a couple of weeks ago.

The trend is likely to solve the shortage problem being seen for the last three-four months. The main production season, October-December, is coming and it is likely that more rubber will come to the market in the coming months.

In April-July, there was a 6.5 per cent rise in production while consumption increased 3.3 per cent. Till June, growth in production was lower than consumption. In April-June, production increased 4.1 per cent while consumption recorded 5.2 per cent growth.

In April, production recorded negative growth of 3.8 per cent while consumption increased 6.8 per cent, according to the Rubber Board. From July, the increase in production was higher than the increase in consumption.

Since production will be at its peak in the coming months, especially during October-December, prices are likely to fall. This, coupled with the proposed import of 25,000 tonnes rubber at lower duty, would ensure adequate supply in the local markets, said traders and experts.

The board has estimated production at 893,000 tonnes (up 7.4 per cent) and consumption at 978,000 tonnes (up 5.1 per cent) in the current financial year.

According to the growers here, both production and consumption are likely to surpass these estimates. Around 350,000 tonnes production is expected in October-December and tapping will be in full swing in January also, they say.

The summer is likely to impact plantations by the middle of February. So, traders said there was a possibility that production would cross 900,000 tonnes.