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Demand-supply gap to widen as rubber output falls

The natural rubber (NR) output in 2009-10 dropped 3.8 per cent to 8,31,400 tonnes from 8,64,500 tonnes in the previous financial year. But, consumption rose 6.8 per cent to 9,30,565 tonnes from 8,71,720 tonnes in 2008-09, indicating a widening demand-supply gap.

According to the Rubber Board, the consumption increased due to a rise in demand from the tyre sector. While major companies like Ceat, JK and Bridgestone Tyres commissioned capacity-expansion plans last year, Birla, Apollo and TVS Sri Chakra Tyres installed new plants. The board said expansion might continue this year as well.

The board’s provisional estimates show the total rubber stock in the country as on March 31, 2010 was 2,48,000 tonnes, as against 1,96,230 tonnes the previous year. But, these figures are not in line with the reality of the local market facing shortage of the commodity. Local traders and farmers believes the stock is in the range of 1,25,000-1,50,000 tonnes.

Consequently, rubber imports also increased 118.7 per cent in 2009-10 to 1,70,048 tonnes, as against 77,762 tonnes the previous year. The increase in imports can be attributed to the price difference in the domestic and international markets. Global prices were lower by almost Rs 17-18 a kg than the domestic prices in the first half of financial year 2009-10.

Courtesty : Business Standard

Rubber output slips, consumption surges

Rubber production slipped 3.8 per cent during 2009-10 even as consumption surged. The industry is, however, relieved that the earlier deficit of over eight per cent in production has been partly made up during the lean wintering months. The very attractive prices in the market have resulted in extensive tapping even in the adverse weather situation, sources in the Rubber Board said.

Despite the fall in overall deficit during recent months, prices are likely to remain firm in the short to medium term, said Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association. The prices are unlikely to rise further unless it is driven by global price surge or excessive speculative activity in the domestic market, he added.

Global trends

Global price trends were dictated by China, India and Malaysia which together account for more than 45 per cent of the global consumption of natural rubber. While these three are major consuming countries in the region, China and India are considered the pace setters of global demand and price trends.

During the first two months of the current year, import by China surged 63 per cent for natural rubber and 118 per cent for compound rubber. In Malaysia, import of natural rubber rose 34 per cent. During the same period, India posted a 17 per cent growth in consumption of natural rubber and over 100 per cent growth in imports.

The high production in India which was evident during the last couple of months continued in March with production growing to 50,650 tonnes from 48,300 tonnes last year. Meanwhile, fuelled by the growing installed capacity in the tyre industry, rubber consumption for the month grew to 79,500 tonnes (74,200 tonnes). The Automotive Tyre Manufacturers Association has pointed out that the capacity in the tyre sector is poised to more than double in the year ahead and consumption will maintain its brisk pace.

Demand-supply gap

Provisional figures for 2009-10 show that production fell to 8,31,400 tonnes (8,64,500 tonnes). Meanwhile, consumption for the year accelerated 6.8 per cent to 9,30,565 tonnes (8,71,720 tonnes). The demand-supply gap has been met through surging imports.

Imports for March were up by over 50 per cent at 10,136 tonnes. But demand-supply deficit was more manifest in the imports for the year as a whole. Imports during 2009-10 were up 119 per cent at 1,70,048 tonnes (77,762 tonnes). The high level of imports was mainly on account of production shortfalls.

Although exports have more than doubled in March, overall export performance for the year as a whole has been lower. Exports fell by close to 50 per cent 23,764 tonnes (46,926 tonnes). Rubber stock continued to be the silver lining for industry. Stocks stood at 2,48,000 tonnes against 1,96,230 (the actual fig available on the image above) tonnes last year.

Courtesy : Thehindubusinessline

Analysis of Indian Rubber Statistics on spread sheets

The analysis of data provided in these spreadsheets are not availble in any other media. The higher stock with Growers are a lime lie on the higher prices in Domestic market. The -Ve missing is another lie by mathematical errors which means publishing higher stocks than real. When the prices are higher production will increase, because latex is getting through tapping. It is not like other crops which provides fruits, flowers etc.

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