Rubber industry in tight grips

ATMA, AIRIA are asking for an independent study to estimate the stock situation

The rubber consuming industries are facing an acute shortage of natural rubber, and have urged for an independent study to estimate the available stocks.

In a communication to the Rubber board, rubber-based industries stated the domestic availability of natural rubber had turned worse in the current financial year.

In May, there was practically no selling of natural rubber (NR) for most part of the month. The consumers have also termed the stock figures projected by the Rubber board as “divorced from reality”, and have asked for a reality check through an independent study.

It is during such precarious times that the available stock of NR should come into play.  

“The situation has been quite challenging for the dependant industries, particularly the small and medium enterprises (SMEs),” said Niraj Thakkar, president of the All India Rubber Industries Association (AIRIA).

Currently, domestic NR prices are ruling around Rs 30 higher than the international prices  for every kg. “The higher domestic prices should be enough trigger for the stock lying with the dealers to find its way to the market. Since there is a continued shortage, it lends credence to industry’s contention that the stock position as suggested by the board may be exaggerated,” he said.

An independent study to check the stock position will do a lot of good to the sector in India, Thakkar urged.

The Automotive Tyre Manufacturers Association (ATMA) stated that a virtual absence of natural rubber in the local markets was playing havoc with the production schedules of tyre companies. While tyre companies have already tied up imports to meet the deficit,  local availability has been much lower than the anticipated during the current fiscal.

"If the present situation is any reflection, our added concern is about the likely scenario in the coming months. While tyre companies do anticipate domestic deficit in NR for which imports are being and will continue to be tied-up, certain baseline quantity is expected from the domestic market. In the absence of such arrivals, the plant level manufacturing is at stake. Moreover, imports to meet the unanticipated shortfall in availability will take 2-3 months for arrival, which will jeopardise the planned production by the companies," said  Rajiv Budhraja, director general of ATMA.

Rubber consumers also urged government for revisiting the projected NR scenario for the fiscal 2014-15 in terms of production, consumption, imports and exports based on actual scenario as observed during April and June.