Price fall upsets rubber output

The sharp and sustained fall in prices has sparked a serious concern over India’s rubber output this year, as small-and medium-scale farmers have reportedly neglected the crop.

In October, the monthly production was 58,000 tonnes — 33 per cent less than the 86,000 tonnes in the same month last year.

October to December is the peak rubber season in India, as winter favours the production of more latex. Around 35 per cent of the total yearly production is carried out during this time.

But this year, the story is different. Planters claim that rubber tapping has not picked up. “No rubber is being tapped in most plantations, especially the small- and medium-scale ones, for the last three months, as the current price will not even cover the wages of the labourers,” said Benny Kuriakose, a planter based in Kasragode, around 550 km north of state capital Thiruvananthapuram. The price of benchmark grade RSS-4 rubber has dropped to Rs 118 per kg across the state. In the northern districts, many farmers want to dispose of their plantations. Many farmer have stopped tapping completely, leading to the whopping fall in production.  

Consumption increased one per cent in October and a major chunk of the domestic demand was met through import, which increased 28 per cent. Last year, the import figure for October was 28,880 tonnes; this year, it rose to 36,865 tonnes.

“The low production has been continuous for the last eight to 10 months. It is likely to continue for the rest of the year,” said N. Radhakrishnan, a leading Kochi-based trader, adding that the rubber planters were in a serious quandary.

For the April-October period of this year, the production dropped by 10 per cent to 3,90,000 tonnes compared to 4,31,000 tonnes in the same period last year.

On the consumption side, however, the trend was reverse. According to the Rubber Board, it increased by 3.4 per cent. Total consumption for this period this year was 5,92,485 tonnes compared to 5,73,110 tonnes.

Sources said the difference between production and consumption was likely to cross a deficit of 2,00,000 tonnes till the end of the financial year, making imports inevitable.

Globally, the price of rubber was less than in the domestic market by Rs 16-18 per kg.

The import would weaken the price in the domestic market further, as the industries would not depend on the local supply anymore.

During the April-October period, India imported 2,63,683 tonnes — 25 per cent more than the figure last year, 2,10,580 tonnes. Sources said, imports may cross 4,00,000 tonnes in this financial year. This will be an all time high.

Although there is an outcry in Kerala for banning import, it will not be possible as the domestic production is too low The end-use industries, especially tyre makers, have to ensure supply. So, any sort of action affecting import will jeopardise the industries.