Natural rubber (NR) exports from the country increased 280 per cent in the April-August period of this financial year. Total exports were 12,219 tonnes as against 4,364 tonnes in the same period last year.
The increase was mainly due to the low price India held for rubber in that period. NR export from the country was in a pathetic stage for the past couple of years for several reasons, including high prices and inferior quality. Exports were almost nil in some months of 2010.
In August, exports grew to 1,082 tonnes as against 17 tonnes in the same month last year. This July, too, India shipped 779 tonnes as against 24 tonnes in July 2010.
This financial year, Indian price tags were advantageous to global buyers as local tags were lower by Rs 17-19 per g. Hence, it is likely that there would be an increase in exports in the remaining part of this financial year. The main drawback of Indian natural rubber in the global mart is its inferior quality. But if the price is lower by Rs 12-15 per kg, the country would be an attractive destination for foreign buyers. As local consumption is higher, India is not a major player in the rubber export market. So, the country is not having much balance to be shipped, another reason for the poor performance on export.
High prices abroad paralysed import of the commodity in April -August period. During this period, 76,116 tonnes were brought into the country as against 85,058 tonnes last year, registering a drop of 11 per cent.
Though the import duty had been brought down to an effective 7.5 per cent from 20 per cent import is not at all cheap for domestic rubber users.
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Due to political constraints, especially from rubber growing states such as Kerala, the Centre is not in a position to allow free import. Therefore, import has been reduced 45 per cent to 14,060 tonnes as against 24,209 tonnes in the same month, last year.
Domestic production of NR maintained 4.5 per cent increase in April -August period and total production crossed 300,000 tonnes, achieving a figure of 311,200 tones as against 297,750 tones.
The prevailing higher price [Rs 215.Kg] is the main reason behind the increase in production as in most of the estates tapping is in full swing during the monsoon season. Domestic consumption in April - August period crossed 400,000 tones mark and touched 400,995 tones as against 388,550 tones in the same period of last FY , registering a growth of 3.2 per cent. But both the monthly production and consumption have dropped for the first time in this fiscal in August. Production dropped to 71,200 tones as against 72,500 tones in the same month of last year while consumption decreased to 77,000 tones from 79,500 tones.
The drop in consumption is mainly due to the set back faced by the tyre companies on the sales front, especially in the original equipment [OE] segment and the crisis faced by the small and medium rubber based units. According to All India Rubber Industries Association [AIRIA] at least 500 such units were closed during last one year period on account of the sharp increase in the price of NR.
The Rubber Board data indicates a total stock of 266,081 tones at the end of August as against 202,798 tones in the same period last financial year. Though the board estimates such a huge stock the industry associations and the rubber traders opine that the actual tradable stock would be in a range of 80,000 -100,000 tones. Automotive Tyre Manufacturers Association [ATMA] said that the country is facing serious supply crisis even in the midst of such a huge stock. According to them stock position in the country is too low that badly affects the availability of rubber. The bord's data is rather inflated in order to influence the government decisions on import, they said. But the Rubber Board has clarified that the stock as per their data is not the actual stock ready for trade, but it is a consolidation of stock with the farmers, stockists, inventory of various companies etc.