India’s increasing import of natural rubber, coupled with a drop in domestic production, is seen hurting rubber volumes at the National Multi Commodity Exchange (NMCE), the only exchange offering futures in the commodity.

According to exchange officials, a sustained increase in imports of natural rubber over the past three-four years has acted as a disincentive for domestic producers, who have cut production by close to 38 per cent since 2011-12.

“Who is interested to trade on the exchange? It is the stakeholders in the physical commodity. And they are the producers and farmers. Because of cheap imports, prices in the domestic market are not remunerative, therefore, natural rubber production in the country has seen a decline over the past few years,” said Anil Mishra, MD, NMCE.

NMCE has seen its average monthly rubber turnover falling significantly, from ₹2,271 crore reported in August 2012, to ₹384.29 crore in August 2016.

According to Rubber Board data, in 2012-13, the benchmark grade RSS-4 prices averaged ₹176.82 per kg, which fell to ₹132.57 in 2014-15 and ₹113.06 in 2015-16.

In 2015, domestic prices peaked at ₹133/kg, while international prices peaked at ₹122, much below the domestic price.

Throughout 2015-16, the domestic RSS-4 price was ruling above the international RSS-3 price, making imports cheaper.

Rubber imports have increased from 2,17,364 tonnes in 2012-13 to 4,58,374 tonnes in 2015-16, thereby indicating a more than doubling of imports.

At the same time, domestic production has fallen from 9,13,700 tonnes in 2012-13 to 5,62,000 tonnes in 2015-16.

The data further reveal a steady increase in domestic Natural Rubber consumption, from 9,72,705 tonnes in 2012-13, to 9,94,415 tonnes.

On Thursday, NMCE rubber for October delivery closed at ₹117.07 per kg, with a marginal rise, and posting a total turnover of ₹4.10 crore.

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