The Hindu Business Line : It's party time for rubber growers in Kerala as prices harden

"People have more money in their hands these days. And it is getting visible. No wonder theft is increasing in my place," Eldo says, ascribing the sudden wealth that induces local thieves, to skyrocketing rubber prices.

But nobody is complaining in the rubber-growing areas of Kerala. Not even Eldo, who has an one-acre rubber plantation.

As domestic rubber prices rule over Rs 65 a kg, it's party time for the growers.

At Muvattupuzha, a buzzing hilly town some 40 km from Kochi, the latest landmark is a sprawling Maruti showroom. Sales in the region have now picked up to some 55-60 cars a month, says an official with the showroom. Along with Maruti, other automakers such as Hyundai and Tata have also started sales outlets in the town. "All this happened in the past six months," he says

Although rubber growers have been getting decent prices for the past couple of years, they have never had it so good like now.

The benchmark Ribbed Smoked Sheet (RSS)-four grade is now ruling near Rs 65 a kg and even scrap rubber, which is the latex residue, is quoting at Rs 40 a kg.

Shortage of rubber in the local market due to heavy monsoon affecting tapping and record high international prices are the reasons that have pushed up rubber prices.

In an acre, usually a grower plants 150-200 trees. If the yield is good, a grower gets about 6-8 kg, which at today's rate will fetch about Rs 400 to Rs 550 a day.

In normal weather conditions, a plantation is tapped for 12-15 days.

Rubber Board estimates that the cost producing a kg of rubber is Rs 30-35 factoring in all the necessary investments and even the opportunity cost.

The farm gate price realisation for the grower is as high as 95 per cent, while his counterpart in other rubber-producing countries such as Thailand, Indonesia and Malaysia get only 70-80 per cent of the day's price for their yield.

This is because Indian farmers mainly produce sheet rubber, while in other places farmers sell latex which needs further processing. A State-wide network of rubber producers' societies also eliminates the middlemen from the trade. Another aspect of rubber trade in the country is its wafer-thin margin for dealers.

Growers agree that they are getting the best prices of their lives now. "I really wonder how long this (trend) would last," says one. They fear that price may collapse like it happened in mid-nineties after touching sky-high.

During that period, Kerala witnessed unprecedented splurge of money by nouveau riche of rubber. When prices crashed, many found that they had squandered their wealth rather than saving it. "Labour and other costs have increased now. Workers are demanding higher wages since the prices have increased. Inputs such as forming acid and other chemicals also have gone costly since the current boom," says Thomas, who has a two-acre plantation.

Also, incessant rains have reduced number of tapping days considerably.

Though even small growers in many areas have gone for rainguards, a small plastic roof over the tapping area on the trunk, the mechanism may not be very effective if it rains heavily in the morning when tapping is to take place.

Also, small farmers tend to dispose of the stocks quickly to meet the expenditure, rather than hoard anticipating better prices.

"Only people with a larger plantation area can afford to stock the sheets and sell when prices are rising," says Madhavan, another grower.

But he too is all smiles when ask about the prices. After all, he is getting more money from his trees than ever before.

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