Sheet rubber supply is expected to improve considerably in the domestic market within a fortnight, even though the price level remains unpredictable. The supply of rubber sheets has been notably reduced owing to extreme weather conditions, which have severely impacted rubber tapping operations.
The shortage of domestic supply, coupled with various global factors, has exacerbated the situation for some industry players, who have complained about the shortage and sought duty-free imports to alleviate the issue.
Market sources said that between January and June this year, domestic rubber prices were lower than those on the international market. While most rubber-using industries had purchased substantial quantities of raw material, some did not engage in procurement during this period, they added.
Geroge Valey of Rubber Dealers’ Federation said that since international rubber prices had been lower than local prices, the disparity might help arrest further price rise and eventually lead to price stabilisation.
The natural rubber shortage has resulted from an unexpected spell of rain in May, which prevented farmers from installing rain guards. The onset of monsoon in June sharply reduced tapping operations. At the same time, the rise in latex prices has led farmers to sell latex directly rather than converting it into sheets.
Besides, imports have been restricted due to a shortage of containers until the end of June. Rising freight and logistical charges, along with the crisis in the West Asia, threw a blanket of uncertainty over shipping operations and disrupted import activities.However, shipping operations are now gradually returning to normal.
Mr. Valey said that latex demand was expected to decrease as tapping operations had gained momentum over the last 10 days. He added that rubber imports for the current and upcoming month might exceed 200,000 tonnes, considering July’s imports were around 55,000 tonnes. Import consignments were in transit following the normalisation of global shipping activities
India expects to produce around 875,000 tonnes of rubber during the current financial year. Production for April and May this year has been roughly the same as last year, at 81,000 tonnes. Last year, April saw a production of 39,000 tonnes and May 43,000 tonnes. This year, there is a 1,000-tonne shortfall in production compared to the same period last year.
Meanwhile, RSS4 grade rubber was sold for ₹250 per kg on Thursday. There is still demand for the product even at this price level.
