Agri Business

Rubber consumption set to outpace output

C J Punnathara Kochi June 9 | Updated on June 09, 2011 Published on June 09, 2011

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Millions of small rubber farmers in the country can look forward to a bright future with firm prices and good demand in the coming days. Preliminary indications are that India would be a net importer of natural rubber in the coming years.

While natural rubber production in the country has grown by close to 15 per cent during the last six years, consumption has grown far faster at over 25 per cent. India's natural rubber consumption seems to be far outstripping production and indications are that the trend is likely to be maintained into the coming years.

This could be in contrast to the trends prevailing in global markets. High market prices have not only brought more areas under tapping but also resulted in greater intensity of tapping operations across the world, the International Rubber Study Group has said. It pointed out that this growth in extent and intensity of tapping was in progress in several South-East Asian countries including Myanmar, Cambodia and Indonesia. The peak prices have also brought large areas of rubber plantations which were lying untapped in Malaysia, back into productivity.

Also, increasing areas are also being brought under rubber cultivation in China and several other South East Asian countries. This spurt in intensity and extent of tapping operations is likely to result in greater rubber production this year. Global rubber production is estimated to grow by 5.8 per cent to 10.9 million tonnes, up from 10.3 million tonnes recorded last year. On the other hand, the rapid growth in the automobile sector of India and China are seen as sustaining the demand for rubber in the coming years.

Widening deficit

While in earlier years, India used to cut a fine line between production and consumption of natural rubber with either a small level of deficit or surplus, the trend seems to have changed for the worse in recent years. The level of deficit which was at a marginal level of 5,740 tonnes or less than one per cent of the total production in 2004-05, has suddenly bloated to 87,255 tonnes in 2010-11, accounting for over 10 per cent of the country's natural rubber production. The earlier year was even worse with the deficit accounting for close to 12 per cent of the country's production.

Published on June 09, 2011
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