Natural rubber (NR) production increased 7.6 per cent in the first six months of the current financial year, compared to a slower growth of two per cent in the consumption during the period.
The latest data of the Rubber Board estimates a production of 375,250 tonnes during April-September compared to 348,625 tonnes in the same period of 2009-10. In the same period, consumption increased to 465,550 tonnes as against 456,365 tonnes in the last financial year.
In September alone, production increased to 77,500 tonnes, while consumption had a negative growth. A total of 78,000 tonnes of NR was consumed last month, as against 78,765 tonnes consumed in September 2009. During April-September, the consumption by automotive tyre manufacturers increased four per cent, according to the latest Rubber Board data.
The main production season, October-December, has just commenced and it is likely that more rubber would come to the market in the coming months.
During April-July, a 6.5 per cent increase was recorded in the production, while consumption increased 3.3 per cent. Till June, growth in production was lower than consumption. In April-June, production increased 4.1 per cent while consumption recorded 5.2 per cent. In April-May, consumption edged up 9.5 per cent while only 2.9 per cent increase was recorded in production.
Since production will be at its peak in the coming months, the supply side is expected to benefit, which may lead to a fall in prices. This, coupled with the proposed import of 25,000 tonnes of rubber at lower duty, will ensure adequate supply in local markets, said traders and experts.
The Board estimated 893,000 tonnes of production (up 7.4 per cent) and 978,000 tonnes of consumption (up 5.1 per cent) for the financial year 2010-11. According to growers, both production and consumption are likely to surpass the estimates due to a bunch of factors.
Also Read
Around 350,000 tonnes of production is expected this time during October-December and tapping would be in full swing in January. The ill-effect of summer is likely to impact the plantations by mid February. So according to them there is a possibility that the production would cross 900,000 tonnes in 2010-11.
As there is a surge in the demand for tyres from both the original equipment and replacement segments, consumption may cross 1 million mark for the first time this year. The upbeat mood in the automobile sector would influence the production of tyres, tube and other rubber-based accessories, resulting in a sharp rise in consumption. So the mismatch in production-consumption is likely to widen, leaving room for more imports to the country.