Rubber prices are surging and it is trading at 4-month highs as unseasonal rains impacted production of rubber. There were strong gains in the past one week in the international as well as domestic markets. Rubber is trading at Rs 182 a kg in the Indian markets.

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The imports in the past couple of months have surged, as unseasonal rains in Kerala has led to decline in tapping. While there are stronger imports and stocking from the domestic players, demand from tyre companies doesn't seem to be very strong.

Rajiv Budhraja, Director-General at Automotive Tyre Manufacturers' Association (ATMA), said, “Rubber has been if I may say a permanent fixture in the concerns of tyre industry, I would like you to consider only two or three key points. First of all, this is the peak season - September to February is the peak rubber season in India. Since we are at the end of November, this is a peak of the peak if I may say and yet there is no visibility of material in the market, which is unprecedented. I mean, it hasn't happened before.”

He added, “There are a number of reasons or causes for it including the unseasonal rains. October has seen unprecedented unseasonal rains, particularly the pattern of the rain also continuing late evenings till early morning, which has impacted tapping. So, there is hardly any material, which is available domestically. And you can imagine the concern when this is so in the peak season."

“The second is the price, today, if you are looking at Rs 180-182 this is again four to six months high compared to last year, around the same time it was Rs 156. So, that itself is an added point of concern.”

On demand and supply mismatch, Budhraja said the year started with an estimated consumption of 11 lakh tonne, which was subsequently revised to 11.50 lakh tonne and then to 11.90 lakh tonne.

"A recent meeting, which was held last week, the domestic consumption has been increased to 12.40 lakh tonne. So, a gain of 140,000 over and above the initial estimates. So, this bridging itself was a major concern.”

On the production side, there is hardly any change. There were only about 30,000- 40,000 tonnes of increase, so leaving the gap to an unprecedented level of 4.4 lakh tonne, according to the rubber board estimates.

"Now, how is this to be bridged? I think we should be putting our heads together.”

For full interview, watch accompanying video...

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First Published:Nov 15, 2021 3:03 PM IST