Low rubber output may raise imports

The country may produce less rubber this year than previously forecast by the government after excessive rains in growing areas disrupted output, likely increasing the need to import the commodity.

Production fell 19 per cent between April and August after Kerala, which accounts for more than 90 per cent of India's output, received above-normal rainfall, Sajen Peter, chairman of the Rubber Board, said in an interview. The board in July had forecast output this year to reach 874,000 tonnes, up 2.5 per cent from a year earlier.

Lower production in the South Asian nation may add pressure to shrinking supplies from Thailand, the largest exporter, and raise costs for tyremakers such as Goodyear India and MRF by forcing them to import more of the commodity. Rubber futures in Tokyo, the global benchmark, have risen 29 per cent in the past year, more than twice as fast as in India.

"The loss in local production has to be made good somehow and importing is the only way to do it,'' D Ravindran, director general of the Automotive Tyre Manufacturers Association, said in a phone interview from New Delhi.

India had a stockpile of 92,000 tonnes at the end of August, up 62 per cent from a year earlier, as growers held back stocks in anticipation of prices rising further, the Rubber Board's Peter said yesterday.