More worry for rubber farmers as price drops Rs 22 per kg in a month

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Thiruvanananthapuram | Published: September 9, 2016 6:06:06 AM

Rubber price has fallen to R122 per kg from R144 per kg in a month. The price crash has happened at the beginning of the peak production season.

Rubber price has fallen to R122 per kg from R144 per kg in a month. The price crash has happened at the beginning of the peak production season.

Till August 9, RSS-4 grade of NR was sold at Rs 144 per kg, says Josekutty Antony, secretary, Association of Rubber Nurseries. “We fear that, by Onam, the main festival season in the rubber belt of Kerala, the grower will be forced to sell his rubber sheet at any low price level,” he told FE.

Tyre companies, which were ready to pay Rs 1 to 2 above the minimum price of R130 mooted by Rubber Board of India before the peak season, have been keeping away from the purchase counters, when the plantations started becoming active by August end.

Besides the price cartel by tyre firms, rubber price is also influenced by the oil prices, say sources in the Rubber Board of India. If one looks at the rubber prices during the six-month period that ended in March, it is clear that every 1% fluctuation in oil price brings 0.68% change correspondingly in NR price, in the same direction.

At the same time, the fall in prices in the peak season has been worrying the planters. UPASI (United Planters Association of South India) has written to commerce minister Nirmala Sitharaman, raising the key issues bothering the rubber economy of the country. At 5.62 tonne, rubber production in 2015-16 is the lowest in the last 15 years, says N Dharmaraj, president, UPASI.

The peak annual production was as much as 9.2 lakh tonne. The lower production is the result of larger untapped areas and lower productivity of trees. What has been worrisome is the low price realisation, given the high wages, shortage of skilled labourers and, currently, the falling prices.

Some consolation for the Indian farmers is that slowdown in rubber production has not been an isolated phenomenon, in recent times. For instance, the rubber production by ANRPC (Association of Natural Rubber Producing Countries) members, which accounts for 90% of global supply, has stayed static, during the first seven months of this year. In fact, the total production (up to July 2016) is up 0.2%, compared to that of the same period in the previous year.

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