Natural rubber production in India slumped 21% year-on-year to 50,000 tonne in June, a development that has left the Indian tyre makers worried as it increases their dependence on imported rubber.
According to the Rubber Board, rubber production fell 14% in the quarter to June to 1,43,000 tonne, while consumption slipped just 1% both in the quarter and in the month of June. Imports of the commodity rose 6% in the quarter to 1,06,294 tonne.
Growers and traders say they expect natural rubber output to remain sluggish in July too as rubber prices have fallen 6% to Rs 125.50 a kg. “The imports will continue. We don’t see a way out as we are expecting an uptick in the tyre demand in the second half of the year,” said Rajiv Budhraja, director-general of Automotive Tyre Manufacturers’ Association.
The price of block rubber, which is preferred by the importers, is as low as Rs 90 a kg in the international market. In the last fiscal year, rubber imports had touched a new high at over 4 lakh tonne.
According to Budhraja, the downward trend in global rubber prices is expected to continue amid concerns over a fall in consumption by China, the world’s largest consumer of rubber. “China is seeing slackness in the luxury car segment and it could have a ripple effect in the automobile sector, affecting the demand,” he said.
The Kerala government had announced a subsidy scheme with a corpus of Rs 300 crore to help small rubber farmers with up to 2 hectare of land. But it is yet to take effect as the registration formalities are going on. Under the scheme, the government will pay Rs 150 subsidy on a kg of rubber to small farmers.
For the scheme to be successful, dealers say, the growers will have to raise production. “Not many growers have installed rain guards for tapping as yet. The production is likely to be low in July too,” said rubber dealer Biju John.
