Rubber holds high export potential

The potential for exporting natural rubber is high on cards due to widening gap in prices between India and world markets. The price of RSS4 had plummeted to Rs 60 last weekend, compared with the Rs 70 it commanded in Bangkok.

This puts India in a position of tremendous advantage and could cause a spurt in exports in the current financial year. Though exports so far have been low, they are expected to pick up by next month as a good harvest is expected.

The country's total export during April-July 2005 was 5,528 tonne only. But traders expect exports to reach the 45,000 - 50,000 range by March 2006.

President of Cochin Rubber Merchants Association N Radhakrishnan told Business Standard that supply of export quality sheet rubber is limited due to bad weather conditions though production has improved much.

A jump in supply would not happen before September. There should be a price difference to the tune of Rs 5 per kg and if the gap widens export market potential will also increase.

India's best export performance was in 2003-04, when total exports increased to an all-time high of 75,905 tonne, mainly due to the export incentive scheme implemented by the Rubber Board at the time.

In 2004-05 only 45,855 tonne were exported and the drop was mainly due to withdrawal of export promotion scheme. As of now global markets are favorable for exports, India can perform better during the year.

But Rubber Board estimates export of 40,000 tonne in the current year. "We can expect good export in the current year provided the price advantage should continue for a couple of months.