Adding heat to the crashing natural rubber market, the commodity’s production during the April-September period has increased by 27.1 per cent, while growth in consumption has slowed down marginally by 5.2 per cent.
Total production increased to 393,115 tonnes against 309,345 tonnes in the same period of the previous year, while domestic consumption increased to 444,340 tonnes against 422,505 tonnes. The rate of growth in consumption during the April-August period was 6.8 per cent.
According to the latest estimates of the Rubber Board, total stock increased sharply to 124,000 tonnes by the close of last month against 81,407 tonnes on September 30, 2007.
| RUBBER TREND (April-September, 2008) | ||
| 2008 | 2007 | |
| Production | 393,115 | 309,345 |
| Consumption | 444,340 | 422,505 |
| Import | 36,386 | 44,247 |
| Export | 29,667 | 17,398 |
| Stock | 124,000 | 81,407 |
This sharp increase in stock is now a serious concern of the ailing rubber market as the domestic production is in full swing in the October-January period. Production during this period will be 410,000 tonnes, according to top dealers, while the Rubber Board estimates a production of 395,000 tonnes.
Since there is a slowdown on the consumption front, especially in the non-tyre sector, there will be a piling up of stock during this season. This may further deepen the crisis in the rubber mart due to the heavy crash in prices in the last couple of weeks. The price of benchmark grade RSS-4 eroded by Rs 57 per kg to Rs 83 today.
Although Indian price tags are well below the global natural rubber mart, the scope for exports is limited, thanks to the slowdown in demand world over, according to leading traders.
Sources say it is likely that there would be a pouring in of rubber to India against the orders placed earlier during the October-December period. So, experts say, the stock would more than double by the end of this year, leading to a possible collapse in the domestic natural rubber mart.
The board projects a total production of 875,000 tonnes for 2008-09, while the current production trend indicates a total production of 900,000 tonnes. Both traders and farmers have demanded a complete ban on imports.
The Cochin Rubber Merchants Association has, in a press statement, demanded for a ban on imports, including through the advance licence route.
