Tyre Makers to Drive Rubber Demand to 1,00,000 Tonne
Demand for natural rubber in India is expected to surge and could reach around 1,00,000 tonne because of rapidly growing demand from domestic industry, particularly from automotive sector/tyre industry along with an equally rise in demand across the globe and stable production conditions in major producing countries like Thailand, Indonesia, Malaysia.
Despite the government’s decision to bring down the import duty to 8% from the peak of 20%, the domestic industry can import upto a maximum of 40,000 tonne in the remaining three months of current financial year as against a deficit of around 1,00,000 tonne which in no way help reduce the prices.
Natural rubber prices shot up to almost Rs 250 a kg, more than double than last year, Vinod Simon, president of All India Rubber Industries Association (AIRIA) told reporters 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. With buoyant economic conditions, coupled with major expansion of tyre companies on account of increasing demand from auto OEMs and components industry amid rising demand from non-auto sectors like mining, pharma (gloves), surgical, footwear and other related industries, it is high time that government not only brings down the import duty further but at the same time finds alternate ways to ramp up natural rubber production in India.”
Though it is encouraging to note that states like Tirupura have been identified to grow plantations, but given the time for a tree to mature it is imperative for the union government to step up measures to ensure adequate natural rubber availability in the short-term, he said.
“While India considered to be the second largest consumer of natural rubber after China, but it stands fourth in production at 9.5 lakh tonne after Thailand (3.6 million tonne), Indonesia (2.5 million tonne) and Malaysia (1.7 million tonne). The per capita consumption in India is much lower than that of the US, Japan, Germany (1 kg as against 12 kgs of other countries).”
While it is encouraging to see the growth of synthetic rubber production in India at 2.5 lakh tonne, however, its application is limited to fewer places as compared to natural rubber. “Synthetic rubber cannot substitute the demand of natural rubber but can subsidise to some extent,” Simon pointed out.
Highlighting that China’s demand is equal that of Thailand’s total production of 3.6 million tonne per annum, China helps industry to import at much competitive rates to meet its total demand. India should look at such options to help the industry to tide over the crisis, he said.
Arun Mammen, managing director of MRF Limited, India’s largest tyre producer, said: “It is crucial for the natural rubber industry to substantially increase the production. Means of increasing the natural rubber production or yield will subsequently help them with higher profits.”
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