KOTTAYAM: Even as the Central Government is making an inordinate delay in declaring a comprehensive package for the ailing natural rubber (NR) farming sector, torrential rain has hit its rubber production in the first quarter of the financial year.
More importantly, the production slipped at a time when the consumption recorded a significant increase, making way for unprecedented import of rubber in the first quarter.
The prospect of domestic rubber market appears to be grim owing to various reasons, including price fall in the international market and uncontrolled import. As per the statistics of the Rubber Board, the rubber production in the first three months (April-June) in this fiscal was 1.26 lakh tonnes against 1.43 lakh tonnes, during the same period in the previous fiscal, recording an 11.9 percent decrease. Consumption was in an upward trajectory, with 3.02 lakh tonne in the same period against 2.64 lakh tonnes in the previous fiscal.
The increase was 14.2 percent. The experts cited various reasons for the increase in consumption, which include the anti-dumping duty (ADD) imposed for the import of truck and bus radial tires from China. This argument is proven right with the substantial increase in the rubber consumption by tire companies, which recorded a 17.7 percent increase in this year. The tire companies consumed 2,16,316 tonnes of rubber this fiscal against 1,83,619 tonne in the same period last year.
What raises concerns among the farmers is the 25 percent increase in the import of rubber, which was 1,18,355 tonnes in the first three months against 94,982 tonnes in the same period the previous year. “The decrease in the natural rubber production and low price in the international market has triggered the import,” an expert told Express.
“However, this would create serious repercussions in the rubber sector in coming months.”
The significant factor is that the price of rubber moved down even while the consumption increased.
“There are various reasons for this phenomenon that include the price fall for rubber in the international market. While the international price of sheet rubber was `30 higher than the Indian market in the first quarter of the previous fiscal, this has turned turtle in this fiscal and the domestic price is `30 above the international price now. If this trend continues, the domestic price is likely to slip down soon,” said sources.
Though the Rubber Board has initiated various measures to promote rubber production, farmers have taken a negative stance towards rubber tapping, taking into account the low income from rubber.