Rubber shortage hits tyre makers

Despite heavy imports of natural rubber (NR) this year, the industrial users are still facing a supply crunch and are unable to have a good inventory due to low availability of the commodity even at high prices.

NR imports increased to 132,445 tonnes in April-November, the highest in recent years, compared with 60,026 tonnes in the same period last year. The Rubber Board estimated the total stock in the country to be at 247,000 tonnes in November against 175,000 tonnes last November. But sources said that the board’s data was inflated and is misleading the stakeholders and the government on the availability of rubber.

The actual stock would be not more than 150,000 tonnes including latex and all grades of rubber, sources said. A leading Kochi-based trader said that even at high prices (Rs 138 a kg) they were not getting required quantity and are not in a position to ensure supply to manufactuers. He alleged that this is mainly due to stocking of rubber by growers and a section of high-end traders in order to deal heavily in the futures market.

In the daily market, growers are reluctant to sell the stock immediately awaiting better prices. This week, the prices touched Rs 142 a kg. Growers believe that the price would cross Rs 150 a kg in the near future. According to traders the data about the stock is not in tune with the real status, but the Rubber Board is trying hard to project that there is no shortage.

Meanwhile, Automotive Tyre Manufacturers Association has sought immediate permission to allow duty free import of 100,000 tonnes of NR through the State Trading Corporation or any other government designated agency in order to tide over the current shortfall in production and steep rise in prices.