Natural rubber and irregularities
S. Chandrasekharan Nair
Email: email@example.com Mobile: 08547722083
Production of NR in India continued to be affected by unfavourable prices. Fall in NR prices coupled with high wages and dearth of skilled labourers, largely compelled farmers to minimise harvesting days, reduce application of essential inputs and stay away from proper maintenance of trees. These developments have affected the productivity which is measured in terms of the production obtained from a hectare of the area tapped. Productivity has also been affected by the abnormally severe summer that was felt in the State of Kerala during the dry season. Although mature rubber area expanded during the year by 16,000 ha to 534,000 ha, a portion of this was left untapped due to unattractive prices, shortage of tappers and high operation cost. From 447,000 ha of the area that was tapped during the year, the country produced 645,000 tonnes of NR during 2014-15, down 16.7 per cent from 774,000 tonnes produced a year ago. The estimated average annual productivity, without accounting the untapped mature area, for 2014-15 is 1,443 kg/ha as against 1,629 kg/ha in the previous year. Looking ahead, the production is anticipated to reverse the trend and rise by 16.3 per cent to 750,000 tonnes during 2015-16.
In sharp contrast to the fall in production, the consumption rose by 4.0 per cent to 10,20,910 tonnes during 2014-15 largely driven by the reasonably sound growth attained by the Indian economy and the domestic automobile industry. The consumption of NR grew by 4.4 per cent in the auto-tyre manufacturing sector and 3.3 per cent in the general-rubber-goods sector during the year under review. Auto-tyre manufacturing sector accounted for 66.7 per cent of the total quantity of NR consumed in the country during 2014-15. The domestic consumption is anticipated to rise further by 3.4 per cent to 1,056,000 tonnes during 2015-16. Imports and Exports The wide shortfall in domestic production coupled with the lower relative prices prevailed throughout the year in the international market, led to a sharp increase in the volume of imports. As per data available from the Directorate General of Commercial Intelligence & Statistics, the country imported 442,130 tonnes of NR during 2014-15 as compared to 360,263 tonnes imported in the year before. The quantity imported through the open channel, which involved payment of customs duty at the prevailing rate, constituted 76.5 per cent of the total imports. The applied rate of customs tariff remained unchanged, throughout the year under review, at “20% of CIF value or Rs.30/kg whichever is lower” for various dry forms of NR (HS 400121, 400122, and 400129) and at “70% of CIF value or Rs.49/kg whichever is lower” for NR in the form of latex. However, the export obligation period for importing NR under the Duty-Free
Authorization (DFIA) scheme has been reduced to six months effective from 9 January 2015. Among the source countries of imports of NR into India, Indonesia dominated by having a pie of 43.1 per cent in the total volume imported during 2014-15. Other major source countries are Thailand (25.6 per cent), Vietnam (21.3 per cent) and Malaysia (4.4 per cent). Coming to the forms of NR imported during the year, technically specified block rubber accounted for 70.0 per cent followed by Ribbed Smoked Sheets (27.7 per cent) and latex (2.1 per cent). Unattractive relative prices prevailed in the international market kept exports of NR unattractive throughout the year under review. The volume of exports came down to 1,002 tonnes during 2014-15 from 5,398 tonnes a year ago. Government of India continued to provide incentives for exporting quality-endorsed branded Indian Natural Rubber under a Market-Linked Focus Product Scheme.
Estimated total stock of NR with growers, processors, traders, and manufacturers at the end of March 2015 was 252,000 tonnes, marginally up from the quantity of 245,000 tonnes held at the same point of time a year ago.
Coming to NR prices, a host of factors have kept sentiments down in the international market throughout the year. Continued global economic uncertainty, economic slowdown in China, outflow of speculative funds from commodities, speculation on sharp fall in crude oil prices and possible substitution from NR to petroleum-derived synthetic rubber (SR), and depreciation in the currencies of major NR exporting countries have exerted downward pressure on international NR prices. Tracking the trends in the international market, the domestic market (RSS 4 at Kottayam) came down and averaged at Rs.132.6 per kilogram during 2014-15 as compared to Rs.166.0 per kilogram a year ago. During the period from 23 December 2014 to 31 March 2015, Rubber Board did not report the market prices of RSS-4. This was in the context of the introduction of a Rubber Price Stabilization Scheme by the Government of Kerala on 22 December 2014 which continued till 31 March 2015. Instead of reporting the market prices, the Board reported the Daily Reference Prices (DRP) which were computed by adding 20% to the FOB price of RSS-3 at Bangkok. However, the actual prices in the domestic market, measured in terms of RSS-5 prices, diverged from the reported DRP and took a sharp downtrend from the end of December 2014. Strikingly, RSS-5 prices at Kottayam ruled below the prices of RSS-3 in Bangkok from mid-February through the last week of March. The gap between the prices of RSS-4 and RSS-5 at Kottayam.
Actually what is the truth?
Daily Price, Production, Consumption, Export, Import, Missing, Supply, Demand, Price Graph etc. are available in spreadsheets. Indian Rubber Statistics published by Rubber Board and it's Analysis on spreadsheets are compiled from monthly rubber statistical news and annual rubber statistics which is available on cash payment. Available Vol 33 published on the net by the Rubber Board. Few Annual Rubber Statistics on the site of Rubber Board like Vol 34, 35 and 36 on cash payment. The details from this rubberstaticsdisplaypage page without compiling the same.
Reason for the price fall of Natural Rubber - in Tonnes
Updated up to July 2015 as per: VOL . 74 . No . 4 . September 2015
At a Glance
Consumption, Export, Balance Stock & Missing Tonnes
Updated as per rajyasabha answer