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10. March 2006

INDIA: Rubber production to exceed targets

Source: Daily "The Hindu Business Line", New Delhi; 10 Mar 2006

Kochi , March 9
India's natural rubber production in the current
fiscal is set to exceed Rubber Board's expectations as
rising prices and conducive weather conditions induced
more tapping and yield.

According to official sources at the Board, rubber
production in 2005-06 would touch 786,000 tonnes,
recording a growth of 4.9 per cent over the previous
year.

The Board had earlier forecast that rubber production
would grow by four per cent in the fiscal to 780,000
tonnes. "Now we would end the year with a production
of 4.9 per cent," the sources said.

During April-February 2006, rubber production stood at
744,000 tonnes, clocking a growth of 5.1 per cent over
the same period a year ago. Rubber stocks are
estimated to be 105,000 tonnes.

Even if one goes by the conservative forecast of
42,000 to 44,000 tonnes production for March, that
would take the total to over 786,000 tonnes.

The first six months of the fiscal year had given rise
to scepticism that the country's rubber production
might not reach the targeted levels for the full year.

Production grew by a meagre two per cent during
April-September 2005.

However, rising price to record levels induced growers
to adopt better farm practices and continue tapping.
Conducive weather conditions also helped.

According to Prof K.K. Abraham of Pala Marketing
Society, a leading cooperative engaged in rubber
trading, even during February, when normally tapping
is stopped, growers kept tapping this year because of
the high prices.

"Normally people stop tapping in the beginning of
February till end of March. But this year some didn't
stop tapping at all," Prof Abraham said.

Unexpected rains during last week and this week in
rubber growing areas in Kerala also helped. Tapping is
now on in full swing and yield too has improved, he
said.

PRICES MAY STAY HIGH
The increase in production is unlikely to ease rubber
prices, Prof Abraham said. "The domestic market is
driven more by trends in international markets rather
than local conditions."

Although prices dropped in the past few days, Prof
Abraham said rubber would stay high in the coming
months. "I don't expect a crash. The possibility of
prices rising is still there and we will see much
higher prices during June and July," he said.

The demand for Indian rubber in international markets
is still on. During April-February, exports stood at
61,493 tonnes over 43,172 tonnes in the same period a
year ago.



(Syed Rashid Ali, Karachi, Pakistan)

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