Natural rubber output may rise 4.7% to record 9,42,000 tonne

Natural rubber production in India, the world?s second-largest consumer, will likely rise 4.7% to a record of around 942,000 tonne in the current fiscal, although consumption may still exceed output due to a revival of demand from the automobile sector, official sources said on Thursday.

Consumption is expected to rise by 4.1% to one million tonne in the fiscal year through March 2013 due to an expected pick-up in demand from tire-makers, who account for around 60% of the total mop-up of the raw material, the sources told FE. State-run Rubber Board may announce its official forecast later this month.

?Higher yield as well as more areas under natural rubber will drive up output this fiscal. Demand will also rise due to a recovery in macro-economic crisis, which may push up consumption by the automobile sector,? said one of the sources.

Car sales in India rose 19.7% in March from a year before, a fifth straight monthly increase, but sales gained only 2.2% in the last fiscal due to sluggish pace of growth in the first half of the year. Demand for cars dipped for the first time in three years last July as high interest rates and rising fuel costs discouraged buyers, resulting in just a 2% rise in natural rubber consumption last fiscal. However, car sales are expected to grow at 10-12% this fiscal, said the Society of Indian Automobile Manufacturers, highlighting a recovery in demand.

Total area under natural rubber may rise to 7,61,000 hectares in 2012-13 from around 7,37,000 hectares a year earlier, while yield is expected to gain 1.5% to 1,865 kg per hectare.

The country has the highest productivity among rubber-producing nations.

However, despite higher areas and yield each year, the government doesn?t expect surplus output of natural rubber at least over the next five years, mainly on anticipation of a revival in demand from tire-makers. India is the world?s fourth-largest natural rubber producer.

By the end of the current Plan period in 2016-17, the country expects to produce 1.16 million tonne of natural rubber, compared with 1.21 million tonne of consumption, said the sources.

Separately, the Rubber Board on Thursday said the country?s imports rose 8.9% in 2011-12 to 2,05,050 tonne, while exports declined 11% 26,531 tonne.

Imports rose despite a weak rupee as traders sought to cash in on a government decision to allow tax-free imports of up to 40,000 tonne of natural rubber last fiscal.