Rubber output may top target

The current financial year is set to see 6.3 per cent growth in the production of natural rubber, while the consumption will slow down to 2.4 per cent, according to the latest provisional estimates of the Rubber Board.

According to the estimates, the country's total production will be 8.53 lakh tonne against 8.03 lakh tonne in 2005-06. The board had originally projected a total production of 8.31 lakh tonne, reflecting a growth rate of 3.5 per cent.

The higher prices during the main production season (October-December) are a major factor for the growth in production. During the peak season (November-January), the total production crossed 2.7 lakh tonne, contributing immensely to the overall growth in production.

But a slow rate of growth in consumption, thanks to a shift in favour of synthetic rubber, is a major concern to natural rubber production. At a growth rate of 5 per cent, the board had originally estimated a total consumption of 8.41 lakh tonne in 2006-07 against the actual figure of 8.2 lakh, growing at a rate of 2.4 per cent.

The slowdown in consumption can be attributed to the tyre sectors' shift to synthetic rubber. Total consumption of synthetic rubber by the tyre industry increased to 2.03 lakh tonne during April-December 2006 from 1.76 lakh tonne in the corresponding period of the previous year. During 2005-06, natural rubber consumption of the automotive tyre and tube industry increased by 9 per cent. But in the current financial year, up to December, the increase was a mere 3.6 per cent. Likewise, the consumption of the non-tyre sector increased by only 0.9 per cent during the April-December period, while in 2005-06, the increase was 2.6 per cent.

According to leading rubber dealers, a large number of small and medium rubber-based units stopped operation in 2005-06, owing to higher prices of rubber. This was the major reason for the slow growth in the consumption of the non-tyre sector.

Meanwhile, imports have already set a new record in 2006-07, touching 82,387 tonne till March 24. This is an all-time high figure in imports of natural rubber. During 2005-06, the total imports were 72,835 tonne.