Rubber output fall raises supply concerns

According to growers, production is likely to drop to 800,000 tonnes, given the crop trend. During 2012-13, output was 912,200 tonnes, a 0.9 per cent rise over the previous year

A significant fall in natural rubber (NR) production has raised concern over supply. Output in April-November, the first eight months of this financial year is down 11 per cent from the same period of 2012-13, to 517,000 tonnes against 583,200 tonnes earlier.

Sheela Thomas, head of the Rubber Board, told Business Standard the total output in 2013-14 would not cross 870,000 tonnes. 'We are assessing the production scene. Anyway, it will be lower this financial year. Intensive rain and the widespread incidence of abnormal leaf fall are the main reasons," she added.

The Board had earlier projected a production of 960,000 tonnes in 2013-14 and consumption at 1,020,000 tonnes, a deficit of 60,000 tonnes. According to growers, production is likely to drop to 800,000 tonnes, given the trend. During 2012-13, output was 912,200 tonnes, a 0.9 per cent rise over the previous year. Thomas said consumption would also be lower than the earlier projection, given the current trend. It dropped 2.3 per cent in April- November over last year, at 648,530 tonnes.

October-December usually sees production at a peak; it is about 40 per cent of total annual output. This financial year, barring April and May, all other months recorded a fall in output. As global prices were attractive, industry opted for imports till the end of October, balancing supply and demand. However, this option became less attractive from last month, as prices abroad shifted. Growers says production would be also lower in December, January, February and March. Normally, output falls during February-April.

Some say production could be substantially hit in consuming industries, especially among small and medium units.

However, the Rubber Board does not foresee a serious problem, saying there'd be an NR stock in the country of 245,000 tonnes.