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Farmers in distress as rubber prices languish at 5-year low |
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KOCHI: With prices of rubber hovering at a five-year low of Rs 121-Rs 122 per kg, production of the commodity in the country plunged for the second consecutive month in September.
The Kerala government's announcement to procure rubber at Rs 5 per kg more than the market rate has brought little cheer to the growers, who demand they should get at least Rs150 per kg to cover the cost of production. The state government's move to buy rubber from growers at Rs 2 per kg more than the market rate a few months ago also proved a non-starter. Production of natural rubber fell by 25% to 60,000 tonne in September, compared to last year, even as consumption went up 6% to 85,500 tonne during the month. In August too, production plummeted 26% after recording a rise in June and July. Kerala accounts for 90% of the rubber produce for the country.
"Discouraged by current prices, growers are reluctant to tap rubber by installing rain guards. Government's announcement has not lifted the spirits of the farmers," said PM Thomas, MD of Pala Rubber Marketing Cooperative Society. The peak tapping season for rubber begins in September, but Thomas opines situation may not be much different in October and after this, just 100 days remain in the current season for intensive tapping. By January-February, the tapping will decrease as weather warms up.
"The growers should realise if they do not tap now, they will be left with no stock in the lean season, which will only pave way for more imports. Procurement or raising import duty will not help as international prices of crumb rubber are around Rs 30 per kg less than present Indian domestic prices," said a rubber dealer in Kottayam, requesting anonymity. The international price of block or crumb rubber hovers around Rs 90 per kg. The Bangkok price of sheet rubber stood at Rs 97.40 per kg on Wednesday.
The supply crunch and lower international prices raised imports of natural rubber 24% to 2,25,652 tonne for the six months to September.
During this period, production fell by 2% even as consumption increased by 4%. In 2013-14, India imported a record 3,25,190 tonne of natural rubber. Dealers say imports could rise sharply to about 5 lakh tonne this year.
The declining prices adversely hit replanting operations. Small-scale growers do not seem interested in replantation, which is necessary for rejuvenation of the crop. "The demand has shrunk from small farmers. The big estate owners are buying as it is the right time to go for replanting. Many postponed it when the prices peaked,'' said Thomas Cheerakuzhy, proprietor of Cheerakuzhy Rubber Nursery in Palakkad.
Source : economictimes.indiatimes.com
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