Reasons: High natural rubber prices, low stock.
The steep rise in natural rubber (NR) prices has resulted in a sharp increase in the consumption of synthetic rubber (SR) in the country. The consumption of SR was up 26.6 per cent during April-July period of the current fiscal year, compared to 4.9 per cent growth in the same period of 2009-10, latest data by the Rubber Board showed.
In volume terms, total SR consumption increased to 132,925 tonnes in April-July as against 104,955 tonnes in the same period of the last financial year.
There has been a deviation in the consumption pattern of rubber-based industries in India, especially by tyre manufacturers. A 32.6 per cent increase was recorded in the consumption of SR by tyre companies during the period at 93,503 tonnes against 70,513 tonnes in the same period last year. Though the consumption of NR by tyre producers during the period increased only 5.1 per cent.
With NR prices almost doubling in the last 15 months and poor stock position led to a supply crunch which forced the industry to depend on SR.
More SR was routed to India through imports as domestic production was only 27 per cent of the total requirement. The price advantage of imported SR compared to NR also caused the increase in its consumption.
Certain segments of tyres like car radials especially meant for export purpose need more SR which is preferable in the overseas markets, according to experts. Traditionally Western countries use SR mainly for production of tyres while Asian countries largely use NR.
The consumption ratio of NR and SR in India was 76:24 few years back, which is now 74:26 in favour of SR. There was an improvement in the domestic production of SR. In April-July period, production increased 2.2 per cent while there was negative growth of 4.4 per cent in the same period of the last financial year. Total SR production increased to 35,144 tonnes as against 34,392 tonnes in April -July of 2009-10.
