KOCHI (Commodity Online): Rubber production is now officially a matter of concern in India. Despite the high prices, production has not touched where it should have been mainly because of the unpredictable weather in rubber producing regions and a huge slump of prices post Japan quake.
Despite being the fourth largest producer of rubber, India still faces a huge shortage of rubber in for domestic consumption. With the rising global rubber prices Indian tyre and non-tyre industry have posed a great concern for the rubber imports for meeting the deficit due to low level of domestic rubber production. Rubber production in India has not seen any major increase in the last 4-5 years. The cumulative growth in the total rubber-plantation area has been significantly low further aggravating the problems of shortage of rubber in the domestic market.
The tyre companies heavily depend on the rubber imports. They form a large share of the total rubber demand. The rising rubber prices will result in an increase in the auto tyres prices. With the decrease in the production of natural rubber the imports are heavily exceeding exports which further increase the pressure on the domestic rubber industry.
Taxes on the import of natural rubber is as high as 20% and increasing global prices has created an alarm among the tyre manufacturing companies in India. The Rubber Board has expressed hope for the increase in the natural rubber production. However, it would still not be sufficient to meet the domestic demand.
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