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20. April 2006

INDIA: Rubber output may top 830,000 tons this fiscal

Source: Daily "The Hindu Business Line", New Delhi; 20 Apr 2006

Kochi , April 19
The Rubber Board has forecast that the country's
natural rubber production will top 830,000 tonnes in
the current fiscal, but consuming industries such as
tyre makers are apprehensive that even this growth
will not ensure easy availability of the commodity
during the year.

The board has projected an annual growth of 3.5 per
cent in production during 2006-07 to 831,000 tonnes.

Consumption is expected to grow by five per cent to
841,000 tonnes.

7.1% growth

During 2005-06, production was 803,000 tonnes,
clocking a better-than-expected 7.1 per cent growth
over the previous year as high prices induced farmers
to vigorous tapping.

Consumption during the year was pegged at 801,000
tonnes (6.1 per cent growth). This was the first time
since 1999-2000 when the country's production of
natural rubber exceeded consumption, a top Rubber
Board official said.

Closing stock

Closing stock by the end of March was 93,000 tonnes,
according to the board. However, taking into account
the opening stock of 2005-06 at 106,000 tonnes,
imports of 44,672 tonnes and exports of 69,446 tonnes
during the year, the closing stock stands a shade over
83,000 tonnes.

The official said the difference in closing stock
calculated is because the board took into account the
wet weight of latex exported, while the closing stock
of the previous year was calculated on the basis of
its dry weight.


For the current year, the board expects the closing
stock by March 2007 to be only around 78,000 tonnes.

Exports are projected at 50,000 tonnes and imports at
45,000 tonnes.

Depleting stock

Natural rubber consuming industries are of the view
that despite the anticipated production growth,
availability of the commodity is likely to be
constrained in the coming months as it has been in
recent times.

"For us this growth rates hardly matter. What really
matter for us is the availability of rubber and stocks
at the end of the year," a tyre industry official
said. "The stocks are going on depleting."

He said in the past average stocks would have lasted
for two months consumption, but now it was enough for
just about a month's usage. The industry will need
about 70,000 tonnes of natural rubber a month in this

Tyre industry accounts for more than half of this.

Change in import plans

Faced with a possible shortage in the market, tyre
makers are planning to import about 20,000 tonnes of
rubber during April-September this year.

"We had planned for an import of 25,000 tonnes. But
now we have changed that since this is a costly
proposition. We are planning to import only because we
fear that our production will be otherwise affected
due to the shortage of rubber in the market," the
official said.

The Rubber Board expects the tyre sector to grow by
7.5 per cent and non-tyre sector by 2.2 per cent in
the current year.

(Syed Rashid Ali, Karachi, Pakistan)

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