The price of Indian rubber, now at an eight-year height, inches towards the 200 per kg Rs. The surge was driven by severe shortages, which had been exacerbated by unprecedented rain in the summit season.

RSS-4 price of rubber sheet varieties used by the tire industry is at 188 per kg, after rising more than 9 percent in the past month. Rubber dealers say unofficial levels around Rs 192 per kg on the market. Natural rubber (NR) reached the high high of RS 245 per kg ten years ago.

Consumption of a surge

Although the production of NR in the first six months of FY22 increased 28 percent to 325,000 tons of year-to-year, could not compensate for consumption that soared when the economy rebounded from the bad effects of Covid-19 pandemic. NR consumption jumped almost 45 percent to 630,000 tons during the period.

Imports contracted by the surrounding tire industry to bridge the gap, however, was postponed by the lack of acute containers and an increase in transportation rates.

Higher latex prices also force a large number of rubber farmers to sell rubber in the form of latex instead of turning it into sheets. The price of centrifugal latex has surged by Rs 10 to Rs 134.75 per kg in one month.

“Heavy rains came on import barriers and high latex prices, it was also, during the seasons tap the November peak. To encourage farmers to spend more rubber sheets, we have decided to provide subsidies of Rs 2 per kg with a stamp of RS 5,000 Per farmer since December 1 for three months. In the absence of enough rubber sheet production, imports tend to rise in the coming months, ” said Dr. Kn Raghavan, executive director of the rubber board.

Usually, the rainfall of the rubber area is carried out during the April-May period. This year was hit by a revival of Covid-19 and Kuncian. The rainkeepers were installed to hold South West Monsun, found ineffective in heavy rain in October and November, said Raghavan. Increasing leaves falling from rubber trees because excess greenness can trigger a decrease in results, he added.

Rain experienced NR output disorders in October and November, although official data has not yet arrived. According to the association of automotive tire producers (Atma), the output of an average of 75,000 tons every month, production is not expected to exceed 45,000-50,000 tons. On the other hand, consumption is anticipated to remain more than 1 lakh tons in each of these months. The deficit will be a major concern for the tire industry, who shed almost 75 percent of NR’s output of the country, Director of Atma General Rajiv Budhaja said.

Because the scarcity came at the time of domestic commercial vehicle production was staring after a prolonged decline, Atma had emphasized the need for free imported NR assignments as far as the supply loopholes that were projected by 4.4 lakh tons and removal of port restrictions to ensure the supply of tire and export Disconnected.

Custom-free import volume can be reviewed every year, as a tariff tariff quota (TRQ), in accordance with the estimated production and consumption entered by the rubber board, said Buddaja.

But local dealers are very objected to such a step. “Duty-free imports and the removal of port restrictions will sound DeathKnell from rubber cultivation in Kerala, which accounts for more than 80 percent of the NR supply in this country. It has faced the shortage of acute tapper despite paying the highest wage. In this country,” said Biju John, a rubber dealer based in Kottayam.

Industrial prospects

Bad weather has affected production in other Asian countries as well, and therefore global supply is expected to remain tight in the coming months, according to the association of rubber-producing countries (ANRPC).

According to estimates by ANRPC in October, world production in 2021 is expected to lack consumption of 192,000 tons. Given the damage caused by heavy rain and floods in Thailand, Indonesia, India, Malaysia and Sri Lanka, global production in 2021 will be lower than the estimated 13.836 million tons of consumption projections of 14.028 million tons reported in the end of October.

As a result, incompatibility between global production and global consumption in 2021 will be far broader than 192,000 tons, according to the recent ANRPC report.

The prospect of requests is subject to risks associated with the potential revival of Covid-19 during the winter. Short-term prospects at NR prices are also challenged by the potential for strengthening the dollar and the possibility of the absence of support from the crude oil market, the report said.