Signalling a further depreciation in the price of natural rubber (NR), the all India production during the first seven months of the current fiscal has risen 19.6 per cent over the same period of last fiscal.
Due to a bunch of reasons like global slowdown, plummeting of the crude oil prices and slowdown in demand world over, rubber prices had dipped to Rs 88 per kg from Rs 142. So the rise in production might aggravate the already troubled situation in the rubber market since the domestic stock had risen to 144,450 tonne by the end of this October from 104,258 tonne during October last. The stock during October 2006 was only 64,575 tonne.
Although exports during April — October period almost doubled, the scope for a sharp increase in exports during the remaining months of the present fiscal is limited as the global price tags are generally lower than the domestic ones.
| SLOW FLOW Overview of rubber in Apr to Oct | ||
| In tonnes |
2007-08 | 2008-09 |
| Production | 3,98,850 | 4,76,855 |
| Consumption | 4,96,935 | 5,17,690 |
| Import | 52,620 | 48,799 |
| Export | 18,209 | 32,760 |
| Stock | 1,04,258 | 1,44,450 |
This translates into a round the year supply of NR in the market and hence a steep escalation in prices can safely be ruled out. The price of bench mark grade is expected to move in a range of Rs 80 -90 for the next 12-14 weeks since production trend indicates so.
There had been a production of 476,855 tonnes during April — October period against 398,850 tonnes in the same period last fiscal year. Interestingly, the pace of growth in consumption has been slowed down at 4.2 per cent only while this was 5 per cent in April - October period of 2007-08.
Also, there had been a negative growth of 14 per cent in production during April — October last fiscal year compared to the same period in 2006-07. The total annual production is projected to cross 900,000 tonne mark this year against 825,000 tonne in 2007-08. So, all production, consumption and stock-related indicators rule out a supply crunch during the remaining part of the present fiscal.
The all India consumption during April — October period rose 4.2 per cent to 517,690 tonnes. Though imports fell to 48,799 tonnes as against 52,620 tonnes in April — October period of 2007-08, during September and October imports rose.
During September, the total import was 12,427 tonnes against 9,093 tonnes in 2007 September-October saw a marginal increase of 8,651 tonnes. It has hence been estimated that the total annual import may close around 90,000 tonne against 87,000 tonne in 2007-08.
Exports had seen a sharp rise as this rose to 32,760 tonne during April — October against 18,209 tonne seen during the same period last fiscal.
