Mumbai: India’s natural rubber stocks are likely to drop 20% by the end of March from end-January as lower domestic prices push up export demand, a senior Rubber Board official said on Monday.
Total stocks are likely to decrease to 180,000 tonnes from 226,000 tonnes in January, the official, who did not want to be identified, said.
“The export demand is growing due to a price difference between Indian variety and international variety,” the official said.
Rubber sap trickling into a cup. India is the fourth largest producer and exporter of natural rubber
Export demand is mainly coming from South Korea, China and Singapore, said Biju John, a Kottayam-based dealer, adding they are buying about 250 tonnes daily from 100 tonnes in November.
In India, the most traded RSS-4 grade is ruling at around Rs96 per kg, against around Rs110 in Thailand, Rubber Board data showed.
Thailand is the world’s largest producer and exporter of natural rubber, while India is the fourth largest. More than 90% of natural rubber comes from South-East Asia.
“The natural rubber output has increased in December and January, due to higher tapping on better climatic conditions,” the Rubber Board official said.
The board has also revised its export target for 2007-08 for the second time in the year due to higher production in the last two months, the official said. The target for the year was 70,000 tonnes, but due to heavy rains and a viral fever that lay low tappers in July-September, the Rubber Board reduced the target to 25,500 tonnes in November.
Now, the board has targeted about 50,000 tonnes, which will be slightly lower than last year’s, the official said. India exported 56,545 tonnes in 2006-07.
However, arrivals are now likely to come down due to the end of tapping season, he said. In India, the peak tapping season starts in October and continues through January.
Prices in the domestic market are likely to rise to Rs107-110 in the next one month as production is declining, which may affect exports to some extent, said Alex Mathews, an analyst with Geojit Financial Services Ltd.
Total output in December-January stood at 217,000 tonnes, a rise of about 10% from a year ago period.
Total output in 2007-08 is expected to reach 825,000 tonnes from an earlier estimate of 819,000 tonnes. Last year the output was 852,895 tonnes.