After 12 years, Indian natural rubber prices stretch over ₹200/kg

After a 12-year gap, natural rubber prices crossed the ₹200 mark in the Kottayam market on Thursday, bringing cheers to the farming community. The Rubber Board market price stood at ₹203 on Thursday and traders say that intra-day trade reached ₹204.

Attributing the reasons for the northward movement of prices to tight supplies in the market, traders said the rising trend is likely to continue. The price rise has led the growers to take measures to improve productivity in the upcoming seasons despite the vagaries of monsoon.

George Valy, president of the Indian Rubber Dealers Federation, said the average price realisation in the last 10 years was below ₹140 and the drop in prices had forced many small and medium growers to abandon rubber cultivation. However, current prices have given the confidence to the farming community to take up cultivation. Sunny days prevailing in the plantations also facilitated carrying out the rain guarding of trees to begin tapping in the monsoon.

Tyre makers’ woes

He said prices are likely to sustain at current levels for some more time until there are fresh arrivals in the market. Tyre manufacturing companies are also buying from the market to meet their production requirements.

Earlier this week, Arnab Banerjee, Chairman of the Automotive Tyre Manufacturers Association (ATMA), told reporters in Kochi that the rubber industry is ready to procure the entire natural rubber produced daily at market price. The industry is consuming 100 per cent of the domestic production which is to the tune of 8.5 lakh tonnes (lt). Right now, there is a demand-supply gap of 5.5 lt, forcing the industry to go for imports.

“We are trying to bridge this gap by investing in natural rubber plantations in the North-East and West Bengal in and around 65,000 hectares which is carried out with the support for tyre manufacturing companies under the initiative of Rubber Board at an investment of ₹1,100 crore”, he said.

Import curbs sought

According to PC Cyriac, former Rubber Board chairman, the small rubber growers in Kerala have been requesting the government to impose some control on imports and help them to get a price covering the cost of production. The price of rubber sheets in the international market has gone up, forcing the tyre industry to pay more. If an incentive is offered, the growers will rise to the occasion and increase production, thereby benefiting the industry.

Once a remunerative price is offered, he said thousands of hectares of natural rubber plantations lying untapped now will resume tapping, which will boost production.