The market began to face shortage of rubber as tapping came to a complete halt due to heavy rains. In addition, severe fungal infection, which has severely affected rubber trees, has led to a decline in production in recent months. Rising demand from rubber manufacturers and wholesalers has strengthened the expectation that Kerala rubber rate will rise further.
But rubber industrialists say, the rise is only temporary. They expect Kerala rubber rate to return to normal level when imported rubber starts arriving in ports by the end of August.
Rubber rate have also risen on the Tokiyo Commodity Exchange (TOCOM), an international future trading center. All the rubber producing countries believe that there will be an increase in rubber consumption when the Covid-19 fears subside. China, the world’s largest consumer of rubber, is expected to see a surge in demand, according to ANRPC, an association of rubber producers.
But the decline in crude oil prices is likely to limit the rise in Kerala rubber rate. This is because the rubber industry is increasingly dependent on crude oil for synthetic rubber.