Chennai: Domestic production of natural rubber could cater to only about half of the consumption in FY19. While consumption went up 9 per cent, production further came down by 7.5 per cent from FY18 levels.

In FY19, the country produced 6.42 lakh tonnes of natural rubber while the industry consumed 12.11 lakh tonnes. The production was just 52 per cent of the total consumption. In FY18, the country had produced 6.94 lakh tonnes, out of the total consumption 11.12 lakh tonnes and was able to cater to 62 per cent of the demand. In the month of March itself, the production at 30,000 tonnes was not even one-third of the consumption of 1 lakh tonnes.

The production has been on a slide for the past few years as tapping in rubber-producing areas of Kerala have remained depressed due to lower prices and higher labour costs. Thinner margins have been forcing several planters go slow with tapping. Lower international rubber prices had capped the rates in the domestic market.  

Rubber consumers like tyre manufacturers have been importing the raw material from countries like Malaysia and Thailand, were it is available at a discount. This trend saw rubber imports going up in FY19 to 5.82 lakh tonnes from 4.69 lakh tonnes in FY18 – growth of 24 per cent.

However, the tyre industry has been complaining about the duties levied on rubber imports, despite the lower domestic availability. Natural rubber imports are charged with customs duty of 25 per cent. Till recently there were port restrictions on imports. The pre-import condition for natural rubber import against tyre export obligation too has been an issue. The export obligation period also has been reduced from 18 months to six months.

Due to lower production, exports too came down in FY19 to 4551 tonnes against 5072 tonnes in FY18. At the end of the fiscal, the country had stocks of 2.87 lakh tonnes, which also declined from 2.92 lakh tonnes in FY18.