Kochi: Rubber price slid below Rs 100 per kilo after a long interval. The Rubber Board paid only Rs 98 for RSS fourth grade rubber on Tuesday, the lowest price in six years.
Rubber growers started the New Year with a price of Rs 130, compared with last year’s average price of Rs 166.02. The price nosedived to Rs 100 last weekend.
Farmers had the best year in 2011-12 when rubber fetched an average price of Rs 208.5. It even touched a record of Rs 243 that year. Prices have been falling steadily since then, tracking global markets. In Tokyo and Bangkok, RSS 3, which is as good as the RSS 4 in Kerala, fetched only about Rs 77 last weekend.
The picture is made even grimmer due to market realities. Farmers do not even get the price listed by the Rubber Board as this is the price at which manufacturing companies procure rubber from merchants. Farmers get only a fraction of this after discounting the packing, loading and unloading charges as well as the margins due to two or more middlemen.
The Kerala government’s scheme to procure rubber by fixing Rs 150 as the minimum support price has not had any significant impact on the market. Companies could buy block (crumb) rubber for a lower price by giving duties of 25 per cent.
Rubber production in India has fallen by about 21 per cent due to the slide in prices and the high cost of production, Planters Association of South India president N. Dharmaraj said.
Many growers have halted tapping as it is no longer viable. Maintenance of plantations and replanting is at a low pace. The price slide has hit about 12 lakh small-scale farmers the most. They have lost about Rs 7,000 crore in revenue.
Only about six lakh tons of rubber is expected to be produced in 2015-16, compared to earlier levels above eight lakh tons.
India is at the sixth place in a list of countries that produce natural rubber. Thailand, Indonesia, Vietnam, Malaysia and China have more production than India.
Consumption of rubber is also on the wane in India. The decrease in the quarter ended June was 2.8 per cent. This fall is due to the increased import of tire and the use of synthetic rubber. Artificial rubber is cheaper to produce given the spiralling prices of crude oil.
The share of artificial rubber has rose to 85.1 per cent of total rubber use at the global level. The share was 35.5 per cent in India in the first half of the current financial year that started in April 2015.
The import of tire and other rubber products also hit the industrial sector.
Thailand to buy rubber for double the price
Bangkok: The Thailand government said it will procure rubber directly from farmers at 60 baht (Rs 110) per kilo, almost double of the current market price in the country. The government has decided to procure two lakh tons of rubber at that price.
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