Natural rubber prices bounce back, growers see green shoots

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Published: May 16, 2019 12:28:56 AM

Disproving doomsayers, price of natural rubber (NR) has caught a bounceback trend that is sending the growers back to rubber sapling replanting turf. Price of premium grade Ribbed Smoked Sheet (RSS-4) has surged to Rs 134 per kilo from Rs 128 per kilo, a month ago.

Earlier, due to poor price realisation, small holding farmers had even been abandoning tapping operations on their rubber trees.Earlier, due to poor price realisation, small holding farmers had even been abandoning tapping operations on their rubber trees.

Disproving doomsayers, price of natural rubber (NR) has caught a bounceback trend that is sending the growers back to rubber sapling replanting turf. Price of premium grade Ribbed Smoked Sheet (RSS-4) has surged to Rs 134 per kilo from Rs 128 per kilo, a month ago.

“Even as May falls in the lean season for NR production, there is a tangible spiral of demand from domestic stockists. Rosier price prospects may jack up the rubber production in the next year’s peak season,” Sibi Monipally, secretary, Indian Rubber Growers Association, told FE.

If the trend continues, the farmers anticipate the premium sheet price to cross `142 per kilo by mid-June.

Earlier, due to poor price realisation, small holding farmers had even been abandoning tapping operations on their rubber trees.

Futures also reflect this increased NR appetite. The May contract of NR, in the Indian Commodity Exchange (ICEX) touched `13,644 per 100 kg, which is the highest in the last seven months.

The October contract of NR on Tokyo Exchange (TOCOM) too had rose a tad.

Consuming industry had seen the drop in Indian NR production, with growing alarm. From 9 lakh tonne in 2008-2009, India’s NR production has shrunk, by nearly one-third, to 6.42 lakh tonne, in 2018-19.

Year-to-year, NR output had fallen 5.8%. “Nearly 48% dependency on NR imports is indeed no good news for rubber-based industries,” according to Rajiv Budhraja, Director General, Automotive Tyre Manufacturers Association.

Rubber Board, meanwhile, targets to raise domestic production to nine lakh tonne in 2019-2020.

Besides better prices, what is needed is a policy framework to nudge the rubber grower to timely replacing of old and ailing trees with new disease-resistant varieties.

“We are working on a package of production incentives, that would win back the confidence of the small farmers, who are the majority in rubber sector”, said KN Raghavan, Executive Director, Rubber Board.

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