Rubber production down sharply

Thiruvananthapuram, Mar 29 | Updated: Mar 30 2007, 06:44am hrs
Countrys rubber production has fallen to a third in last three months. Just as high Bangkok prices make imports unviable, spot market prices of RSS-4 seem heading northwards.

From 96,500 tonne in January 2007, production had halved to 47,500 tonne in February, say Rubber Boards latest statistics. In March, the production is expected to end up in 37,500 tonne. The forecasts are that in April, the output is likely to fall to 30,000 tonne.

The fall in latex production is due to the unusual summer temperatures in Kerala rubber plantations, say experts. The summer time mercury in hilly slopes in Kerala has been riding 2-3 degree celcius higher than that in the previous year, says Centre for Monsoon Studies, Kochi. In just one day, liquid latex prices in Kochi bourses flared up by 60%. RSS-4 prices have been yo-yoing in a Rs 95-100 per kilo band.

The shortage in India coincides with the rubber demand boom wordwide, in tune with Chinas construction activities. Rubber industry analysts quote reports from an international rubber journal that supply from Thailand, the worlds largest rubber producer, has been disrupted this year by racial problems in the south of the country.

All stakeholders in rubber value chain, from industrial buyers to farmers, are agitated about the element of unpredictability that rubber futures have introduced to the spot market.

In a meeting convened in Kottayam this week, Rubber Board chairman Sajan Peter cautioned that all those doing futures trading are not getting licenced from the Board.

It was just 1.6% of the total forwards that actually converted to physical deliveries, MC George, national trustee, Infarm (a farmer outfit) pointed out. Most stakeholders complained that unlicenced futures operations were the culprit in the wild price fluctuations when the latex production was at its leanest.