Voicing concern over a squeeze in domestic availability of natural rubber, the tyre industry has said the unpredictability of raw material availability has made the production process in disarray.

The Automotive Tyre Manufacturers Association (ATMA), in a letter to the Rubber Board, sought urgent action to improve NR availability to avoid plant stoppages and disruption. The industry accounts for over 70 per cent of NR consumed in the country.

Rajiv Budhraja, Director-General, ATMA, said the tyre Industry has been experiencing tightness in domestic availability of NR for some time. However, currently, a severe crunch is being witnessed even though NR prices have touched multi-year high. The paucity of NR needs to be addressed at the earliest so that tyre production processes are not disrupted.  

Questions mark over stocks

The Rubber Board, according to ATMA, had estimated the total domestic NR stock available in the country at the start of the current fiscal at 3.7 lakh tonnes. Unfortunately, the visibility of such a high stock to support domestic demand is not there.

Notwithstanding the prices ruling higher, the availability of NR has dried thin. It is feared that a section of NR producing interests or trade are withholding the material in anticipation of increase in the NR prices worsening the availability, ATMA said.

Consuming interests have no option but to increase reliance on imports to bridge the huge deficit. However, imports contracted now, with no visibility of local arrivals, may arrive subsequently and may coincide with peak domestic production season, ATMA said.

Offtake pips output

The uncertainty in availability of NR, the key raw material, makes production planning at tyre plants very challenging. Being customer-centric, tyre companies need to meet the local and global requirements irrespective of shortage of any local material, Budhraja said.

ATMA has urged Rubber Board to closely monitor the volume of domestic NR sales transacted in recent weeks and advise growers, dealers and processors to ensure adequate and uninterrupted availability of NR so that the consuming interests are not impacted.

The growth in NR consumption in the country continues to be ahead of the production growth. India produced 8.5 lakh tonnes of natural rubber during FY24 with a growth of 2 per cent. Domestic consumption on the other hand witnessed a growth of 5 per cent and crossed 14 lakh tonnes during the year.