Rubber output likely to rise on cooler weather

Rubber production in India, the world’s fourth-biggest grower, will increase from September and meet a target for a full-year gain as latex yield improves during cool weather, a government board said.

Output is forecast to advance 0.3 per cent to 867,000 tonnes in the 12 months to March 31, after dropping 13 per cent to 209,825 tonnes in April-July because of dry weather, Sajen Peter, chairman of Rubber Board, said in an e-mail.

“The peak production season is yet to come and any revision of the target will be considered only after December,” Peter said. Similar early shortages in previous years had been “largely” offset by a later increase, Peter said.

A rebound in India’s natural rubber production may help cool a 42 per cent jump in local prices in the past six months and meet rising demand for the commodity from tiremakers including MRF, JK Tyre & Industries and Apollo Tyres. India’s rubber demand has gained from February because of steps taken by the government to boost demand, Peter said.

Rubber futures in Tokyo rallied the most since July 31 yesterday amid optimism a global economic recovery will boost consumption. The January-delivery contract fell 1.9 per cent to ¥0.9 yen per kg ($2,137 a tonne) at 2:23 pm Tokyo time.

India’s output is forecast to rise from last year’s 864,500 tonnes as production seasonally rises from September during cooler weather after the monsoon ends. More than 90 per cent of the country’s rubber is from Kerala state in southern India.

Consumption in the year to March is forecast to rise 1.7 per cent to 881,000 tonnes as a recovery in economic growth from the fiscal second half boosts manufacturing, Peter said. April-June demand in India, the world’s third-biggest rubber user after China and the US, gained 1.4 per cent, the board said.