Rubber output fails to match demand tempo

Rubber output in the country has grown only marginally even as its consumption and exports have surged ahead substantially.

Similarly, price of natural rubber was just Rs 21.15 a kg in June 1991. By July 25, 2005, the price rose to hit Rs 70 a kg. However, during the last decade, total production increased by just 245,000 tonne.

Even though the average price was hovering above Rs 60 a kg during April-September 2005, production increased by only less than two per cent. Interestingly, consumption during the same period increased by a healthier six per cent.

During the period, production of natural rubber was 3,41,000 tonne, indicating an increase of 7,000 tonne from the year-ago figure. According to estimates of the Cochin Rubber Merchants Association (CRMA), consumption stood at 4 lakh tonne, compared with 3,75,000 tonne during the same period in 2004-05.

In 2004-05, total production of the commodity was 7,49,000 tonne and according to estimates of the Rubber Board for 2005-06, the output will surge to 7,80,000 tonne. Total production in 2000-01 was 6,30,405 tonne and this had crossed the 7-lakh mark in 2003-04.

After consumption surpassed domestic production in 2000-01, imports have also been increasing on a year-on-year basis, slowly but steadily. Thanks to the government's subsidy scheme, exports registered a rise in 2003-04.

Owing to the advantageous position of the country in the current global market, exports have turned buoyant again since April 2005. During April-September this financial year, rubber exports stood at 21,000 tonne.The exports figure is expected to overshoot the estimated 40,000 tonne and touch 60,000 tonne due to the favourable global market conditions this year. The present production trend of natural rubber indicates a shortage within a few years' time. The only way out would be bringing more land under rubber cultivation, experts say.

Experts said the marginal increase in production was due to an increase in average yield during the last five years. At present, production and consumption go hand in hand, but as domestic consumption and exports are increasing at a greater pace than the production, more imports would be inevitable as rubber-based industries are growing.

During the first six months of the current fiscal, total imports decreased marginally to 36,300 tonne, mainly due to the higher international prices.

N Radhakrishnan, president, CRMA, said area under rubber plantation has not increased in the last few years due to various factors.

This is the main reason for the poor performance in the production front.Due to the fall in prices during 2000-04, re-planting had also declined in the last few years. Thanks to higher prices for the last one year, farmers are not interested in re-planting, but to produce maximum latex in order to realise better prices.