Rubber consumption dips on high tyre imports

A sharp increase in the import of truck and bus (T&B) tyres in the last few years is the main cause for the drop in natural rubber (NR) consumption in India. NR consumption had dropped by 10 per cent at 66,000 tonnes in December 2008 and 5.7 per cent at 67,000 tonnes in January 2009. The overall increase in consumption during April-January period of 2008-09 is just 1.8 per cent while this happened to be 5 per cent in the same period of last financial year.

According to experts this is mainly due to increase in import of tyres as that much NR is not being consumed by the tyre manufacturing sector of the country. On an annualised basis, based on the actual import of T&B tyres in April-October period, 14,016,96 tyres are expected to be imported in 2008-09.

The average weight of these tyres is 84,102 tonnes of which 35,042 tonnes is the NR content. This was 21,818 tonnes in 2006-07 and 33,196 tonnes in 2007-08, signifying the increase in the import of NR through an indirect route. Another statistics also shows the impact of this on rubber import. About 80,000 tonnes rubber is expected to reach the country by way of direct import in 2008-09. So the total import would be 115,042 tonnes by the end of fiscal 2008-09. Total export is estimated to touch 50,000 tonnes giving a net import of 65,042 tonnes in the current financial year.

There is also a sharp increase in the value of imported tyres as a percentage against tyre export from the country. During 2003-04 total value of imported tyres was just 9.17 per cent of total export of tyres. This percentage has shot up sharply in April-August period of 2008-09 to 71.45 per cent of the total value of exports from the country. During the period tyres vauled at Rs 916.54 crore were shipped while tyres worth Rs 654.86 crore were poured into the domestic market.

Almost 90 per cent of the import segment is handled by two countries, China and South Korea. This increase in tyre imports has brewed up a serious threat to the natural rubber cultivation in the country as well as the domestic tyre manufacturing sector.

The manufacturing sector is reeling under heavy pressure as the demand is reduced sharply on account of the global economic turmoil.