Worries over economic downturn in China have dragged rubber prices to a six-year low, with prices declining to ₹112 a kg for RSS-4 grade.

Kerala is no exception, as similar moves were witnessed in the local market in the wake of the price fluctuations in the international market, says Anu V Pai, Analyst at Geofin Comtrade.

However, George Valy, President, Indian Rubber Dealers Federation, went on to say that the price decline has cast a shadow on the prospects of Kerala rubber growers at a time when the State is in a festive mood with Onam celebrations round the corner.

The consistent downward trend in prices has been reflected even in the consumer sales in the rubber growing areas, as is evident from the sales drop in all verticals in the festival period.

RSS-4 grade rubber in the physical as well as futures market tumbled with spot market lowering to its weakest level since 2009.

According to Valy, the consistent fall in prices has led to a production drop in Kerala which is below five lakh tonnes as of today. It may be recalled that Kerala farmers had produced nearly 10 lakh tonnes in 2012 and the production loss this year is at five lakh tonnes. With an average price of ₹140 per kg, the estimated loss for the state is about ₹7,500 crore, he said adding that the situation may be further aggravated by today’s price fall.

“The rubber farmers, he said, are passing through a severe crisis and this has impacted even replanting activities and use of manure, de-weeding, etc in the cash-strapped sector.” He expressed the hope that “there will be better days ahead with prices expected to go up following the improvement in consumption in China and correction in crude prices”.

N Radhakrishan, Advisor, Cochin Rubber Merchants Association, said that the decline would not affect the country’s economy or the people except rubber growers. Since the imports are cheaper now, the production cost would not go up.

He pointed out that the prices of similar grade are only at ₹90/kg in other rubber producing countries against ₹112 in India. “We are in a global economy, we cannot charge higher prices to our own industry and make it uncompetitive,” he said.

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