Tyre manufacturers upset as Kerala growers act pricey on rubber harvest

Written by M Sarita Varma | Thiruvananthapuram | Updated: Mar 14 2014, 10:28am hrs
With the growers in Kerala refusing to part with their freshly harvested natural rubber (NR), the tyre industry has expressed concern over a rubber famine hitting the markets.

The Automative Tyre Manufacturers Association (ATMA) has raised concern over its rising import-dependence for the critical raw material following "the expected revival in automobile sector and resultant demand for tyres improving in FY 14-15.

Rajiv Budhraja, director-general, ATMA, said it is the first time that domestic availability of rubber, even during the peak production months, has been "erratic and uncertain."

The peak season (September 13 to February 14) production dropped to 5,18,000 mt as against 5,46,500 mt in the corresponding period last fiscal.

Consumption on the other hand increased by more than 6,000 mt in this period. Even though the peak production season has just concluded, market availability of rubber has been extremely tight leaving tyre companies with no other option but to import as the situation is likely to only worsen," he said.

ATMA argues that the extent of drop in NR production can be assessed from the fact that the Rubber Board has already scaled down the original production estimate twice in this fiscal from 9.6 lakh mt to 8.7 lakh mt to further down of 8.5 mt.

" However, even the revised estimate of 8.5 mt, made as recently in February, is also not likely to be achieved as the actual production in the April-February period is just 7.8 Lakh mt. In April-February of 2012-2013, the production was 8.6 Lakh mt, ATMA said.

Growers said the complaints of a fall in rubber production are exaggerated. "In the beginning of the peak season, because of excessive rains, there was a nominal fall in production. In September, for instance, there was a production fall of approximately 100 kg. In the later months, as climate improved, production picked up fast and this will soon reflect in the final production estimate of the Rubber Board," said Siby Monipally, general secretary, Indian Rubber Growers' Association (IRGA).

Monipally admits that trading of stocks have been low in the production centres in Kottayam and Kochi in the last few weeks. This is mainly because of Kerala's recently announced procurement programme, offering to buy RSS-4 grade rubber at Rs 171 per kg. Since the price of RSS-4 in the open market has been hovering at Rs 147 per kilo this week, farmers have been shying from selling the sheets.

There is still no sign of any grower getting the promised Rs 171 a kg price although the state's rubber procurement has "officially" started.