Rubber output seen 60,000 tonnes lower due to rain

Rubber output seen 60,000 tonnes lower due to rain

Mayank Bhardwaj / Reuters

New Delhi: India’s rubber output is likely to fall by 60,000 tonnes in the year to March 2008 from an earlier estimate of 803,000 tonnes as heavy rains disrupt collection, the head of a government body said on Tuesday.

“An unusually extended monsoon has hampered tapping," Sajen Peter, chairman of the Rubber Board, said, adding that it was now peak season.

“Production will fall but availability will not be a problem due to good reserve stocks."

Rains dilute the latex extracted from trees and lead to fall off in the number of tappers turning up for work in what is still a largely manual industry.

An outbreak of the mosquito-borne Chikungunya virus in the southern state of Kerala, which accounts for 90% of India’s rubber output, had earlier forced the board to cut its forecast from 874,000 tonnes.

The Rubber Board was set up by the commerce ministry to help develop the sector.

Industry fears a sharp fall in output from last year’s 853,000 tonnes would lead to an acute shortage in the domestic market, pushing up prices.

“We are worried about availability now," K.T. Thomas, former president of the All India Rubber Industries Association, said.

But Peter, a senior government official, said prices would remain under control because of good stocks and there would be no dearth of the commodity.

“We see a downfall in production due to heavy rains and the Chikungunya disease, but there is no need to lose sleep as current stocks are more than what we had during the same time last year," he said, declining to give the exact quantity.

Peter said even if output falls by 60,000 tonnes there would be no shortage.

“Imports in January and February made us comfortable in terms of stocks. There is no reason for prices to go up and I will be happy to see prices moving in tandem with global trends," he said.

He said rubber prices were at around Rs90 ($2.28) per kg, in line with global rates.

Domestic prices might not be higher than global markets but they have increased in the last couple of months and the government should ban the futures trade in rubber, Thomas said.

“We have recommended that volatility should not be more than 2% in the intra-day trading in rubber, but a ban is uncalled for," Peter said.