Bangkok: India may import 67% more natural rubber this year as demand climbs on sustained economic growth, an industry group forecasts.
The country may buy a net 75,000 tonnes from overseas, compared with 45,000 tonnes last year, said M.F. Vohra, senior vice-president at the All India Rubber Industries Association. This, even as India’s natural-rubber output rises as much as 5% to 875,000 tonnes, he said. The Indian economy has expanded at an average 8.6% since 2003, boosting demand for tyres and gloves. “Given the growth, we should be able to overtake Japan and South Korea to become the world’s No. 3 consumer in the next five years,” Vohra said. China and the European Union are the two largest consumers.
Natural-rubber futures on the Tokyo Commodity Exchange, the global benchmark, have advanced 94% in the past two years on rising demand from China and India.
Global demand for rubber, and the challenges of boosting supply, are the principal topics that will be addressed on Monday and Tuesday at the World Rubber Summit in Bangkok.
“India’s rubber consumption pattern is changing due to the high prices of natural rubber,” Vohra said. Natural rubber’s share was expected to decline to 64% this year from 70% a year earlier, while synthetic rubber will gain to 25% from 21%, he said. Recycled rubber accounts for the balance.
The Indian government, which levies a 20% duty on natural-rubber imports, has no intention of reducing the duty, the commerce ministry had said in April. The country’s tyre makers want the government to halve the tax to bring it in line with the levy on finished products, such as tyres, D. Ravindran, director general of the Automotive Tyre Manufacturers Association of India, said on 16 April.
“Not only does India tax rubber imports, it also has some non-tariff barriers in place, such as requiring rubber imports to be inspected by the Rubber Board,” Vohra said. “Such barriers make imports difficult.”
Thomas Kutty Abraham in Mumbai contributed to this story.