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India's 2014/15 natural rubber imports to fall

In 2014/15 demand for natural rubber could rise to 1.01 million tonnes, up 4.1 per cent

Reuters Kochi
Last Updated : Feb 20 2014 | 9:57 PM IST
India's imports of natural rubber are expected to fall by third in 2014/15 to about 200,000 tonnes, as tapping of newly planted trees likely boosts domestic production to a record high, a senior government official said.

A drop in imports by India, the world's fourth biggest producer, would put pressure on global prices that are sitting not far off multi-year lows.

"Trees planted in non-traditional growing areas are becoming ready for tapping. If weather remains normal, next year production can rise to 950,000 tonnes," Sheela Thomas, chairman of the Rubber Board said on Thursday on the sidelines of the India Rubber Meet. This would top 913,700 tonnes in 2012/13.

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India's natural rubber imports are estimated to surge 38 percent in the current 2013/14 year to 300,000 tonnes after production was disrupted by heavy rainfall during the June to September monsoon months.

The country's production in the first ten months of the 2013/14 April to March financial year fell by 9.4 percent from a year ago period to 723,000 tonnes, despite a 2.8 percent rise in tapping area, data compiled by the Board showed.

A sharp drop in rubber prices also contributed to squeezing production as some farmers curtailed tapping, Thomas said.

The spot price of the most-traded RSS-4 rubber (ribbed, smoked sheet) at India's Kottayam market fell to 14,200 rupees per 100 kg last month, the lowest level in nearly three years.

Indonesia's SIR20, usually the cheapest grade in Southeast Asia, was traded earlier this month at 85.00 to 85.50 US cents a pound ($1.87 to $1.88 a kg) for March/April delivery. The grade was last traded at similar prices in 2009.

Consumption revival
India's consumption of natural rubber is expected to be flat in 2013/14 due to a slowdown in the domestic auto industry, denting demand for natural rubber from tyre makers, Thomas said, although demand is slowly improving.

In 2014/15 demand for natural rubber could rise to 1.01 million tonnes, up 4.1 percent from the 970,000 tonnes estimated for the current year, she said.

Car sales in India fell 7.6 percent in January, the fourth straight month of decline, according to figures released by the Society of Indian Automobile Manufacturers (SIAM), in a market set to fall for the second straight year.

Finance Minister P Chidambaram, in his interim budget, proposed reducing the excise duty on small cars, two-wheelers and commercial vehicles to 8 percent from 12 percent.

"The changes in excise duty can improve auto sales. Revival in truck and bus sales is crucial for natural rubber demand," Thomas said.

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First Published: Feb 20 2014 | 8:30 PM IST

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