An increase in natural rubber (NR) production in January has eased the pressure on the demand-supply gap in the domestic market. Production rose 3.7 per cent in January to 102,500 tonnes, compared to 98,800 tonnes in the same month of the previous year. Whereas, consumption during the month fell 2.4 per cent to 82,000 tonnes, compared to the previous month.
The cumulative shortfall in demand-supply during April-January fell to 15,580 tonnes according to the latest figures of the Rubber Board. This was 38,385 tonnes during the April-December period.
The cumulative production in April-January increased 4.6 per cent to 784,400 tonnes. While the total consumption grew at a much slower pace to 799,980 tonnes, a rise of 1.3 per cent. The much slower growth in consumption eased the pressure on the domestic demand and supply.
Earlier this month, the tyre industry had demanded duty-free import of 100,000 tonnes of rubber in the next financial year to bridge the widening demand-supply gap.
Indian Rubber Growers Association (IRGA) general secretary Siby J Monippally said the shortfall is meagre and the consumer industries could avail the advance licence channel (duty entitlement passbook) to meet the domestic shortage, since the export of tyres were to the tune of Rs 3,600 crore.
During 2010-11, the rubber-based industry had imported 114,214 tonnes of NR through duty-free channel. The projection of production and consumption during 2012-13 are 942,000 tonnes and 100,60,00 tonnes, respectively. Therefore, shortage of only 64,000 tonnes, he said. Consumer industries will be entitled to import 130,000 tonnes without import duty on the strength of their exports. Till January-end, 162,927 tonnes were imported through the advance licences and reduced duty schemes.
Meanwhile, the Intern-ational Rubber Study Group (IRSG) has forecast surplus production of NR in 2012. Global NR production is likely to rise 7.8 per cent to 11.8 million tonnes this year compared to 10.9 million tonnes in 2011. This is thanks to fresh production available from trees planted in the mid-2000s in major producing countries.
Global NR consumption may touch 11.7 million tonnes in 2012 as against 11.1 million tonnes in 2011. Thus, the shortfall of 159,000 tonnes in 2011 is expected to swing to a surplus of 81,000 tonnes this year, IRSG says. This trend may lead to a bearish phase in the rubber mart across the world in the current year.