By Rajendra Jadhav
MUMBAI, April 21 (Reuters) - India's rubber production is likely to rise by 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said on Wednesday.
"Last year production was down due to bad weather. Now conditions are better. We are estimating higher production," the official, who declined to be named, told Reuters.
The Rubber Board is a statutory body constituted by federal government, under the Rubber Act 1947, for the overall development of the rubber industry in the country.
In 2009/10, the country had produced 831,000 tonnes of rubber, down from 864,500 tonnes a year ago, he said.
But analysts and Kerala-based spot traders were sceptical about the projected jump in production in 2010/11.
"Yes, production will rise this year. But I am not expecting it to rise by 62,000 tonnes. Around 20-25,000 tonnes rise is possible," said Shiji Abraham, analyst with JRG Wealth Management.
Lower domestic supplies and robust demand from tyre makers had forced India to more than double rubber imports last year and pushed up prices to a record.
But improvement in production may cut 2010/11 rubber imports to 70,000 tonnes from 171,000 tonnes a year ago, the board official said.
Market participants said rubber prices, which hit record highs on Wednesday, are unlikely to fall drastically as consumption is also rising in the world's fourth biggest rubber producer.
The consumption for 2010/11 is pegged at 978,000 tonnes, up 5 percent compared to 931,000 tonnes a year ago.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) hit a record peak of 17,600 on Wednesday, the highest level for second month contract since futures trade was introduced in 2003.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) hit a record high of 16,950 rupees in Kottayam, Kerala, on Wednesday, as per data compiled by the Rubber Board.
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 percent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
The South Asian country's rubber exports in the current year are likely to double to 50,000 tonnes, the official said.
(in.reuters.com)
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