Rubber Prices Rise Albeit Slumping Demand
Published On 23-Dec-2019
As on Tuesday, the rate of RSS-4 rubber variety, used by tyre industry, stood at Rs 132.50 per kilogram – a 6 per cent rise in the last six weeks
Despite the dip in rubber demands, its prices showed a sharp year on year rise of 9 per cent in the peak tapping period of December.
In contrast to the figures presented by Rubber Board, industry executives have indicated a slump in the rubber industry. Highlighting the reason for the dip, Tomy Abraham, president of Indian Rubber Dealers Federation said, “Prolonged rains have hindered tapping, which should be down 30-35 per cent from normal times.”
On year on year growth, the Rubber Board data says that though the production increased by 8 per cent to 373,000 tonnes in April-October, the consumption witnessed a fall of 8 per cent to 657,120 tonnes. During this period, imports too dropped by 18 per cent to 302,340 tonnes.
As on Tuesday, the rate of RSS-4 rubber variety, used by tyre industry, stood at Rs 132.50 per kilogram – a 6 per cent rise in the last six weeks. Moreover, the coming days also do not sound very positive for the rubber industry as January contracts rates are marked at Rs 135.89 per kg on the Indian Economy Exchange (ICEX).
Companies involved in growing the rubber plantations aren’t happy despite high crop season. Santhosh Kumar, Senior VP, Harrisons Malayalam, said, “Defoliation seems to have set in early like it did last year, maybe because of changing weather. Looking at the present situation the tapping season may not extend beyond January.’’
Echoing similar words Rajiv Budhraja, Director General of Automotive Tyre Manufacturers’ Association (ATMA), said, “Demand continues to be on the slower side. While rubber price can rise on sentiment, we feel that the board’s production figures are overestimated.’’
For the uninitiated, tapping is the process of extracting the liquid from the trees which is required to make the rubber. There are massive plantations of such trees which are cultivated every year in India and worldwide.