Rubber price jumps amid shortage

CHENNAI: India is facing an acute shortage of natural rubber with domestic production falling short of demand by around 5.5 lakh tonne.

According to Shashi Singh, president of the All India Rubber Industries Association (AIRIA), natural rubber production in India has increased from 8.4 lakh tonne in 2022-23 to 8.6 lakh tonne in 2023-24. "But there has also been a sharp rise in natural rubber consumption which has gone from 13.5 lakh tonne in 2022-23 to 14.2 lakh tonne and so the deficit is still 5.5 lakh tonne," he said.

India, he added, has always been dependent on imports because domestic production of natural rubber has not kept pace with demand. "Natural rubber imports face a 25% customs duty or Rs 30 per kg whichever is higher but that's just one part of the issue," said Singh. The other is the availability of natural rubber. "Right now China is stocking up and Bangladesh, which had become a good source of natural rubber, is in turmoil," added.

The immediate result is a sharp increase in the price of natural rubber. "The price is currently at Rs 247 per kg which is the highest in 15 years compared to Rs 182 per kg as on April 1, 2024. So in 4 months, it has nearly doubled," he said.


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