KOCHI: The gap between production and consumption of natural rubber in the country is likely to touch 5 lakh tonnes this fiscal given the pace at which the production has been dropping with plummeting prices.
The current level of prices at Rs 108.50 a kg is at a seven-year low and is expected to push down the production of the commodity further. Already, the production is down by 15% over last year. The total natural rubber production had dropped 15% to 6.55 lakh tonnes in 2014-15.
The various stakeholders in the rubber sector predict the production to reach around 5.50 lakh tonnes this year, with some forecasting further drop. At the same time, the consumption is expected to go over 1 million tonnes.
“Our production is now grossly insufficient to meet the consumption and irrespective of whether prices are low or high, we will have to import. The centre should come out with measures to protect the interest of consumers to the extent of rubber imported to bridge the gap,” said Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association (Atma).
The natural rubber imports reached an all-time-high of 414,606 tonnes last year. With the increase of the import duty by 5% to 25%, there has been a fall in imports till October this year by 11%. But considering that the international prices of rubber are Rs 27 to Rs 30 below the Indian price, the imports are set to rise in the coming months.
“Those who are tapping rubber now are getting a poor yield as there has been no proper maintenance of the rubber trees with price fall. Gradually, from selfsufficiency we are turning into a rubber import dependent country,” pointed out a major rubber dealer Biju John.
The market intervention measures by the government to provide succour to the growers through a subsidy have not yielded much dividends. As Kerala accounts for about 90% of the rubber grown in the country, the state government is implementing a Rs 300-crore package to small growers so as to pay them a fixed price of Rs 150 per kg with the difference between the current price and fixed price as subsidy.
