Manila: India may become the world’s second largest consumer of natural rubber in seven years, overtaking the US and Japan, as demand rises from producers of automobile tyres and gloves.
Demand in the world’s second fastest growing major economy may reach 1.44 million tonnes by 2020, up from 899,000 tonnes forecast for the current year, Sajen Peter, chairman of the state-run Rubber Board told a conference in Manila on Friday.
“Consumption of industrial materials is positively related to growth in the gross domestic product,” Peter said.
Every drop counts:A rubber tree being tapped for its milk on a rubber farm in Palakkad, Kerala.
The country may consume more rubber than Japan “in a couple of years” and overtake the US by 2015, he said.
Soaring demand for rubber in China and India may help sustain the rise in natural rubber prices. Rubber prices are hovering above Rs120 a kg in Kerala as record crude oil prices made synthetic rubber more expensive and China boosted purchases. Kerala accounts for more than 90% of the natural rubber produced in India, the world’s fourth biggest producer.
“The market will remain tight through 2014,” Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries, told reporters.
Expansion by members of the body, which accounts for 94% of global output, may bring in additional supplies starting 2012, he said.
The US is the world’s second largest user of the commodity, accounting for 10% of global demand, followed by Japan at 9%. China accounts for 26% of the demand, Jacob said.
India’s natural rubber output may rise 6% to 875,000 tonnes in the year 31 March from a year earlier, as mid-summer rains improve prospects for higher yields, Peter had said on 8 May.
Kerala received the highest rainfall in 133 years in the month of March.
India’s economy has expanded an average 9.2% since April 2006, the quickest rate since independence in 1947. That’s prompted General Motors Corp., Nissan Motor Co. and other car makers to invest a combined $6 billion (Rs25,680 crore) in Indian plants, likely stoking demand for new and replacement tyres.
“India’s economy is poised to continue its robust growth,” Peter said.
Thomas Kutty Abraham in Mumbai contributed to this story.