For India,there are well-defined constraints to expand NR supply. These include limited availability of suitable land in the traditional rubber-growing region (especially in Kerala), acute labour shortage, and the low yield potential in the non-traditional regions (30-35% lower compared to the traditional region). Moreover, climate in the traditional region is gradually becoming less suitable for growing rubber, Jom Jacob, senior economist, ANRPC, told FE. At the same time, the countrys demand for NR is expected to rise faster than supply, mainly driven by the dominant auto-tyre manufacturing industry,.
Jom Jacobputs forward the March-31 expiry date of importing rubber at ministry of commerces concessional rate , also as a reason for thespurt in NR importsin fourth quarter. The validity of concessional import tarifffor NR was due to expire on 2011-2012 financial year-end. A maximum 40,000 tonne quantity of NR was permitted to be imported at 7.5% concessional rate against the general rate of 20% per kg. According to Sheela Thomas, Chairman, Rubber Board, the country faces a gap of 66,815 tonne in the domestic production and consumption of the commodity in 2011-2012. The total production in FY12 grew 4.3%, logging 899,400 tonne, as against 861,950 tonne in the previous year.