Slowdown affects demand for rubber

A serious slowdown was seen in consumption of natural rubber (NR) in December as economic slowdown heavily affected the rubber-consuming industries, especially automotive tyre manufacturing sector. Consumption has decreased 12.5 per cent in December ’08 at 64,000 tonne against 73,110 tonne during the same month of 2007. A similar fall happened when you compare consumption in December with November ‘08. During November, the total consumption was 73,000 tonne according to estimates of the Rubber Board.

The cumulative figure during April-December period of 2008-09 also showed a slower pace in growth at 2.3 per cent. Till November India’s natural rubber consumption had edged up 4.2 per cent. The nine-month period cumulative consumption stood at 657,665 tonne against 642,570 tonne in April - December period of 2007-08.

A sharp fall in prices (from Rs 140 per kg to Rs 70 per kg) has affected production too. Though production moved up during the April - December period, the trend is not encouraging according to estimates. Production registered a 7.9 per cent rise, at 669,080 tonne against 620,060 tonne during April-December period of 2007-08. The growth rate has dropped sharply, from 13.1 per cent in April-November period to 7.9 per cent, in April-December period.

The production estimates indicates a sharp southward movement of production during December. In December, production has been estimated at 96,200 tonne against 111,730 tonne in previous December.

Earlier, both the Rubber Board and traders had projected a total production of over 100,000 tonnes in December.