However, India’s export had a pathetic show and it dropped 98 percent, down to just 40 metric tons, compared to 1,723 metric tons in the April–May period of 2013-14. Only 11 metric tons were exported in the month of May.

 

A sharp drop in the international prices of natural rubber compared to local prices is the main reason behind the rise in imports. For the last year, local prices were up by Rs 20 on an average than the prices recorded in the global markets, mainly in the Bangkok market. The Bangkok market quoted Rs 119 for a Kg while the price in Kottayam and Kochi markets was Rs 144/Kg. The price of SMR-20, which is almost equivalent to the RSS-4 grade for all practical purposes, is available at a price tag of Rs 98/kg in Bangkok trading.

 

So import is the natural option for the industries, especially for the tire makers, even at remitting the import duty. So according to experts, import is likely to be 50 percent of the total annual production in India in the current financial year. In this financial year, import is likely to cross 400,000 metric tons as per the current trend.

 

India’s import in 2013-2014 was 324,467 metric tons, while the yearly production was 844,000 metric tons. It was for the first time that import crossed the 300,000 metric tons mark. This year it may set a new record crossing 400,000 metric tons. Natural rubber prices nose dived in the world market due to a glut visible continuously for the last four years.

 

Weakening of global demand, especially in China, the world’s largest consumer, is the main factor for the incessant fall in prices for the last 12 months. Meanwhile, production during April and May dropped 7 percent at 104,000 metric tons compared to 112,000 metric tons in the same period of the previous financial year.

 

According to Rubber Board data, consumption had a slight increase of 0.4 percent at 165,000 metric tons. This was 164,305 metric tons in the April–May period of last fiscal year.

 

According to the board, production in 2013-14 was down 7.6 percent at 844,000 metric tons compared to 913,700 metric tons in the last fiscal year. This is for the first time during the last ten year period natural rubber production records a dip. Earlier, the Rubber Board had scaled down the original production estimate for 2013-14, twice from 9.6 lakh metric tons to 8.7 lakh metric tons and further down to 8.5 metric tons.

 

However, even the revised estimate could not be achieved. Against the 7.6 percent fall in production, during 2013-14, consumption edged up 0.5 percent. So the supply-demand mismatch is a serious concern as an upswing in production is not expected in this financial year too. The gap between local production and demand was 133,400 metric tons as per the board’s estimates. This gap may widen in the current year as production remains either static or drops, but a sharp upward swing may occur in the case of consumption."