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Reason for the price fall of natural rubber

Rise and fall in prices of natural rubber

The WTO is an international organization for the formulation of international trade policies. The GATT was created on January 1, 1948 and became the World Trade Organization on January 1, 1995. In 1995 India signed the General Agreement on Tariff and Trade. In 1995-96, the required quantity of natural rubber was the production subtracted from the sum of Consumption and export which was 19685 tonnes. 51635 tonnes being imported with an additional Import of 31950 tonnes. For the first time in 1995-96, the closing stock was increased above one lakh Tonne to 103190 tonnes. Closing stock of previous year was 69550 tonnes, additional import of 31950 tonnes and a figure of 1690 tonnes was added to get higher closing stock. RSS 4 also fetched a higher price of Rs 5204/quintal than the previous years. 1995-96 onward the price was gradually reduced as 4901, 3580, 2994, 3099, 3036, 3228 respectively with an additional import of 160528 tonnes. Due to the price fall, in September 2001 the government had announced the minimum tariff for RSS 4 at Rs 34.05 per kg was implemented by the Rubber Board. In 1995-96, consumption was 525465 tonnes and production was 506910 tonnes and in 2001-02 the increased consumption was 638210 tonnes and production was 631400 tonnes. From 1995-96 to‍ 2001-02 the price deteriorated.

In 2002-03, the sum of consumption and export subtracted by production, the requirement was 101301 tonnes. With the import of 26217 tonnes the remaining 75084 tonnes didn’t got imported. In 2002-03 the closing stock was reduced to 117995 tonnes compared to the previous year which was 193070 tonnes. Next year the closing stock was again reduced to 85190 tonnes. From 2002-03 to 2010-11, the closing stock has been increased to 288300 tonnes by importing an additional import of 86517 tonnes; Price increase took place as 3919, 5040, 5571, 6699, 9204, 9085, 10112, 11498, 19003 respectively. In 2002-03, consumption was 695425 tonnes and production was 649435 tonnes and in 2010-11, consumption rose up to 947715 tonnes and production rose up to 861950 tonnes. From 2002-03 to 2010-11 there were attempts to control the increasing price.

The impact of additional import from 2011-12 onward has not finished even after the Corona. In 2011-12 the sum of consumption and export subtracted by production the requirement would be 87860 tonnes. An additional import of 126573 tonnes rose up to 214433 tonnes. If the closing stock of last year was 288300 tonnes along with additional import of 126573 tonnes and the total closing stock would be 414873 tonnes. But the Rubber Board vehemently reduced a figure of 178598 tonnes from the total closing stock and published it as 236275 tonnes. The additional import up to 2017-18 was 636055 tonnes and continued the reduced closing stock as 156429, 155345, 58218, 53094, 12193, 18478 respectively. Between 2011-12 to 2018-19 prices were 20805, 17682, 16602, 13257, 11306, 13549, 12980, 12595 rupees per quintal respectively, while consumption increased from 964415 tonnes to 1211940 tonnes and production decreased from 903700 tonnes to 651000 tonnes. In response to a query raised by Joy Abraham MP in Rajya Sabha in the year 2013-14, the response of Hon Commerce Minister Smt. Nirmala Seetharaman was that the estimated shortage was 207520 tonnes instead of 137520 tonnes. In order to rectify the 70000 tonnes error, a two-member Commission reduced the production from 884,000 tonnes to 774,000 tonnes. In 2013-14, the tappable area was 518100 hectares and the tapped area was 475200 hectares. In 2018-19 the increased tappable area was 640000 hectares and the reduced tapped area was 448000 hectares. In April 2019 Dr. K.N Raghavan IRS took over as Executive Director. Under his initiative Rubber Board corrected the arithmetical error in closing stock for the year 2018-19 by adding additional imports with Closing Stock to tally supply and demand. The production of 7.15 lakh tonnes approximately has been achieved with the adoption of untapped rubber plantations under the leadership of Rubber Board for the year 2019-20. Due to the fact on tally of both sides, import was reduced to 4.5 lakh tonnes approximately in 2019-20. In the meantime, a state government incentive @ 150 was introduced in 2015. Thus from 2016-17, there was a slight increase in production. The benefit goes to manufacturers at lower price. From 2011-12 onward, prices have been falling. At present Corona was able to increase its momentum.

In addition, a number of contracts have been signed by Govt of India to assist manufacturers. The Auto Tyre Manufacturers Association has announced lot of benefits are available. But it’s not available on their site right now.

From the above figures, it can be seen how the rubber board has helped to reduce the price of rubber to help the tyre makers.

Google translate with mistakes. Corrected by my Grand Daughter.

Arithmetical error to help whom?


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