 "Heavy rain hits rubber production, spirals domestic prices")
Heavy rain in Kerala for the past two months has badly hit rubber production, leading to sharp rise in local prices, in sharp contrast to the bearish global trend.
While supply has been declining, it has dropped drastically over the past two weeks, triggering the price of RSS-4 grade to shoot up to Rs 195 a kg. This is a significant rise compared with the global market prices. Bangkok on Tuesday quoted just Rs 149 for the same grade. Such a huge price difference — Rs 46 a kg — is the highest gap quoted during the last 10 years.
Kochi-based traders said rubber is not available in the market even at this price. N Radhakrishnan, a leading rubber trader and former president of Cochin Rubber Merchants Association, told Business Standard rubber is not available even at Rs 200 a kg.
Industry sources indicated importing rubber is now a viable option because of the price difference. Heavy monsoon showers and strong wind have more or less stopped tapping in almost all rubber plantations across the state. This is more visible in districts such as Kottayam, Pathanamthitta, Idukki and Kannur.
According to Sunny Jacob, managing director of St Mary’s Rubbers Private Limited, there was about 50 per cent shortfall in latex production during June and July. He said this is for the first time that his 10-year-old company had slowed production for want of field latex.
Kerala is facing such a strong monsoon after 22 years. Many rubber plantations suffered damages as hundreds of trees were uprooted and rain guards (plastic sheets attached to the rubber trees to guard against rains) were destroyed.
Growers told Business Standard that workers are not able work in plantations as the risk is very high. Unusually for Kerala, rains continue for hours on end without any gap and with strong winds. According to them, production is likely to drop 50 per cent this month as well.
With the domestic availability thinning out and prices spiralling, the tyre industry is looking at substantial import of natural rubber this year.
According to the Automotive Tyre Manufacturers Association (Atma), domestic natural rubber prices command 26 per cent higher than international prices and the required quantity and grade of the commodity is not available even at these prices. Atma has asked the government to allow import of natural rubber on a tariff rate quota (Trq) basis.
While supply has been declining, it has dropped drastically over the past two weeks, triggering the price of RSS-4 grade to shoot up to Rs 195 a kg. This is a significant rise compared with the global market prices. Bangkok on Tuesday quoted just Rs 149 for the same grade. Such a huge price difference — Rs 46 a kg — is the highest gap quoted during the last 10 years.
Kochi-based traders said rubber is not available in the market even at this price. N Radhakrishnan, a leading rubber trader and former president of Cochin Rubber Merchants Association, told Business Standard rubber is not available even at Rs 200 a kg.
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Traders pointed out that due to the acute shortage, rubber-based industries are struggling to maintain their production and inventory.
Industry sources indicated importing rubber is now a viable option because of the price difference. Heavy monsoon showers and strong wind have more or less stopped tapping in almost all rubber plantations across the state. This is more visible in districts such as Kottayam, Pathanamthitta, Idukki and Kannur.
According to Sunny Jacob, managing director of St Mary’s Rubbers Private Limited, there was about 50 per cent shortfall in latex production during June and July. He said this is for the first time that his 10-year-old company had slowed production for want of field latex.
Kerala is facing such a strong monsoon after 22 years. Many rubber plantations suffered damages as hundreds of trees were uprooted and rain guards (plastic sheets attached to the rubber trees to guard against rains) were destroyed.
Growers told Business Standard that workers are not able work in plantations as the risk is very high. Unusually for Kerala, rains continue for hours on end without any gap and with strong winds. According to them, production is likely to drop 50 per cent this month as well.
With the domestic availability thinning out and prices spiralling, the tyre industry is looking at substantial import of natural rubber this year.
According to the Automotive Tyre Manufacturers Association (Atma), domestic natural rubber prices command 26 per cent higher than international prices and the required quantity and grade of the commodity is not available even at these prices. Atma has asked the government to allow import of natural rubber on a tariff rate quota (Trq) basis.