India's natural rubber exports slumped to just 94 tonnes in May compared with 3,159 tonnes in the same month last year, as domestic prices far exceeded global rates, according to state-run Rubber Board.
The shipment continued to slump since the beginning of this fiscal on high domestic prices and the country exported only 724 tonnes of natural rubber in April against 3,690 tonnes in the corresponding period last fiscal.
"Domestic prices of natural rubber were ruling far above the international price, making the shipment a less profitable option. While the average domestic price of the natural variety touched Rs 9,805 a quintal in May, that in the global market was ruling at Rs 8,300 a quintal," a senior board official told PTI.
However, the decline in prices in the overseas market prompted domestic traders to purchase more from overseas boosting imports, which surged by 31 per cent to 14,322 tonnes against 9,950 tonnes in the year-ago period.
An industry expert said the increase in import was due to the revival of demand from the automobile sector, coupled with the wide variation in the domestic and global prices.
Indian automobile companies prefer natural to synthetic rubber to manufacture tyres.
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The price gap is still growing. The rubber price stood at Rs 10,000 a quintal at Kottayam today, while the price of the RSS-3 variety of rubber is ruling at Rs 8,150 a quintal at SICOM in Singapore.
Natural rubber production, too, has declined by 9.3 per cent to 54,500 tonnes during April against 60,115 tonnes in the year-ago period, partly due to drought in some growing belts in Kerala.
The consumption of natural rubber was down marginally to 70,000 tonnes from 71,215 tonnes in the same month last year.
The growing demand from tyre manufacturers prevented demand from a significant decline.