Kochi: Natural rubber production in India has dropped by 18.46% in the first five months of fiscal 2007-08 due to excessive rainfall and viral fever, which kept rubber tappers away from the plantations for several weeks. This may result in a lower output of 800,000 tonnes against a targeted 850,000 tonnes for the year.
Sajen Peter, chairman of the Rubber Board, however finds comfort in the forecast of the International Rubber Study Group (IRSG) that sees the production-consumption gap narrowing to 118,000 tonnes by 2008-2009. IRSG is a forum of the world rubber industry that keeps a close tab on supply and demand of rubber.
According to Peter, the heavy south-west monsoon in Kerala has affected rubber production, though the coming months may see better yield, narrowing the shortfall. The state accounts for over 92% of India’s rubber production.
Faster economic growth in Asia that accounts for around 63% of the global consumption is proving beneficial to the sector, he said. While India held the fourth position globally in production and consumption of rubber, the country has the highest productivity of 1,879 kg per ha annually.
Over the years, it has maintained a steady share of over 8% in global production, even though the land under cultivation is just 6.4%. However, rising imports over exports had been a disturbing trend this financial year.
Between April and August this year, imports touched 33,442 tonnes, sharply higher than 24,823 tonnes in the year-ago period, while exports were 14,823 tonnes. Peter attributes this to the “unhealthy manipulation” in the futures market and hoarding, which resulted in “artificial increase in domestic prices” during the third quarter of 2006-07.
Prices did not fall when production reached its peak year and instead were ruling at a much higher level than the international prices. This forced the domestic tyre industry to import rubber. In fact, it has set an import target of 100,000 tonnes this financial year.
Now, domestic prices are on par with the international price of Rs88 per kg, and the import orders placed last year have started coming in. This is reflected in the higher imports during this financial year.