KOCHI: Natural rubber consumers, the tyre industry in particular, anticipate subdued growth in the first half of 2017, even as producers ex pect better prospects this year with an increase in prices.
The prices of the commercially important RSS 4 variety are at a five month-high of Rs 139 per kg. "The bullish trend will continue as the demand in China, the largest consumer, is going up," said CP Krishnan, whole-time director of Geofin Comtrade."The crude oil price is also looking up, lifting the synthetic rubber prices. This will reflect on the Indian natural rubber sector as well."
The international Rs 159 per kg, prices, at Rs 20 above the India are an prices, making imports unviable. Imports of natural rubber touched a record 458,374 tonnes in 2015-16.
In the first eight months of this financial year, imports increased 8 per cent from a year ago. The international prices began rising in December. "The output in largest producing country, Thailand, is down. It has been made up to a certain extent by the mounting production in Vietnam. The domestic prices should touch Rs 150 before March," Krishnan said.
Rubber production has been on the rise this year, with a 12 per cent increase in the eight months to November from a year earlier, to 428,000 tonnes. But as the difference between the domestic and international prices has narrowed, there are fewer takers for the state government's price support scheme. "From July 2016, 70,000 farmers joined the price support scheme, taking the total number of beneficiaries to 4.36 lakh," said Jaydev Anand, deputy director of Rubber Board.
A sum of Rs 596 crore was paid to small growers in the year to June 2016 under the scheme.
Source: economictimes.indiatimes.com