India rubber prices may climb on auto sector demand

CHENNAI (Commodity Online) : With just three months left in the current fiscal, tyre companies in India can import only a maximum of 40,000 tons of rubber while the deficit is estimated at 1,00,000 tons. Needless to say, prices of natural rubber are northbound.
The prices shot up double the previous year figures to almost Rs 250 a kg this year. Mining, pharma (gloves), surgical, footwear and other related industries are also in need of natural rubber.
Government had recently brought down import duties from 20% to 8%. Even this measure could not stave off price surge.
Vinod Simon, president of All India Rubber Industries Association (AIRIA) told Financial Express on the sidelines of the 6th Rubber Expo in Chennai, "Our objective is to ensure availability of the commodity rather than look at prices at this point of time.”
India is the second largest consumer of natural rubber after China, while it ranks fourth in production at 9.5 lakh tons . Thailand produces 3.6 million tons; Indonesia, a decent 2.5 million tons and Malaysia another 1.7 million tons.
Simon stressed on finding out more options to increase rubber acreage and escalate production. Recently, states like Tripura were identified to have conditions supporting rubber cultivation.
He said synthetic rubber production, currently at 2.5 lakh tons is yet to make a difference to prices as a substitute.
For the time being, Chinese demand of natural rubber is equal to the rubber output of Thailand at 3.6 million ton per annum. The government there is doing all it can to help the domestic industry with imports.
The per capita consumption of natural rubber in India is 1 kg as against 12 kgs of other developed countries. At the time of filing this report, the February contract of rubber was trading a tad lower by 0.17% at Rs.23405

(Source: http://www.commodityonline.com/news/India-rubber-prices-may-climb-on-auto-sector-demand-35803-3-1.html)