Supply and Demand for the year 2006-07

The media was not able to publish an analysis of supply and demand of natural rubber for the year 2006-07 like this blog post. During 2006-07 natural rubber production in the Country was 852,895 Tonnes and consumption was 820,305 Tonnes and opening balance stock as on 31st March 2006 was 93,020 Tonnes. It means India is self sufficient for the requirement of manufacturing sector. Was there any need to import 89,699 Tonnes and to export 56,545 Tonnes? Actually the export import is a game to reduce the International and Domestic prices. The analysis of statistics for the year 2006-07 is as follows in Table 1.

Sale by Growers = Opening Stock with growers OR previous month end Balance + Production – present month end stock with them. ( 22,125+ 84900)-53885 = 827,050 The total of monthly production as per monthly rubber statistics published by Rubber Board was 849,000 instead of 852,895.

Purchase by Manufacturers = Consumption + Balance Stock with manufacturers – Opening stock with them + Import. (820,305+ 70,480)- (49,990 + 89,699) = 751,096 Tonnes. The import as per monthly rubber statistics published earlier as provisional by Rubber Board was 88,040 and updated it as 89,699 Tonnes.

Table 1

O/S* Opening Stock, A valuable correction on the purchase done by Sri K.Parameswaran Nair (Retd Dy tehsildar) on 6-10-07
The monthly export and import in detail as follows in Table 2. From Table 1 and Table 2 the analysis can be done during the peak production in India from October to January Import increased and purchase from the domestic market reduced. At the same time with a huge stock in Indian market from October to January the price of RSS 4 at Kottayam market was higher than International RSS 3. From this we can reach in to a conclusion that the Bulk Dealers and Manufacturers co-operation to reduce future price in both International and Domestic in future for a long duration with a high volatility in price. But it is failed in India due to hot summer, fever for work force, continuous rain are became reason for reduced production. The total export of 56,545 Tonnes carried out when the average Domestic price for RSS 4 was Rs. 9204/- per quintal and the import of 89,699 Tonnes carried out when the average International price for RSS 3 was Rs. 9779/- per quintal. And when we get the final result of export value will be below both these prices and the availed average import price is Rs. 8698/- per quintal. The month end stock with manufacturers as on 31st March 2007 was 70,480 Tonnes (Auto tyre units 55342 + Other manufacturing units 15138 Tonnes). It became a reason for the lower Domestic price from 9 to 12 rupees below International from April to June and 5 rupees in July 2007.

Table 2

For more details Visit Supply & Demand on Microsoft Excel Worksheets.

When the production in India was sufficient a decision taken by the Minister of Commerce and Industry was to reduce the import duty and later it have been canceled.

Upasi opposes change in rubber import tariff