Rubber may see heavy shortfall

Consumption seen outstripping production in 5 yrs

Natural rubber shortage, that is pulling prices to record levels, is likely to be further aggravated with an estimated shortfall of 2,00,000 tonne within next five years.

This shortfall could widen the gap between production and consumption growth patterns which are currently almost the same.

This widening gap between production and consumption could lead to further increase in prices beyond the Rs 90 mark hit recently.

According to estimates of the Rubber Board total production had exceeded consumption by 2,000 tonne last year. But experts said that the situation would change in the future as consumption is increasing on a great pace while production growth is stagnating.

Planting of new trees and replanting of aged one has slowed which could lead to acute shortage of rubber by 2010. Rubber Board estimates say the growth in production in current year will be 3.5 per cent, lower than the 7 per cent recorded last year.

The board had aimed to replant 43,145 hectares of land during last five years but could manage only 30,880 hectares. In the next five years 1,12,370 hectares need to be replanted, which was last done in 1979-1984. This works out to 22,500 hectares of replant annually.

However, in last five years replant has been done at an yearly average of just 6,000 hectares.

According to the present growth rate in production total production is estimated to be around 8,72,225 tonne in 2010-11. But the estimated total consumption will be 10,72,000 tonne, meaning shortage of almost 2 lakh tonne in the next five years.

Total production in 2010-11 is estimated on an assumption that the average per hectare production in 2006-07 will be 1,825 kayo and will grow by 25 kayo every year. But there would be a drop of 50 kayo annually where partial replanting is on and the current average per hectare production is 1,700 kg.

Even with the concerted effort by the Rubber Board over the last two decades, total production in the northeastern states is just 3 per cent of the country's total.

Farmers are earning an a high average price of Rs 85-88 a kg on sale of rubber. This is making them reluctant to replant their plantations as it involves a temporary hold on tree tapping.

There is also demand from the growers to enhance the subsidy for planting and replanting in order to encourage traditional farmers to increase production.

The board provides Rs 20,000 for replanting in traditional areas up to a maximum of 2 hectare. For new tree planting it is Rs 12,000 a hectare and limited to 2 hectare. In non-traditional areas the rate of subsidy for planting is Rs 20,000 a hectare and the maximum limit is 5 hectare.

But the average per hectare expense for planting is Rs 1,25,000. So growers in Kerala are demanding Rs 1,00,000 as subsidy for a maximum area of 5 hectares.

N Radhakrishan, vice-president, Indian Rubber Dealers Federation, said that unless both the central and state governments take initiative to enhance rubber production there would be deep crisis in rubber-based industries of the country.