Rubber Shortage Vexes Tyre Sector Amid Auto Revival
Kochi: India’s tyre industry is worried over the continuing shortage of natural rubber in the market at a time when the automobile sector is showing signs of revival. “Despite Rubber Board data showing higher production this year, the flow of rubber into the market has not been steady,’’ said Ashish Pandey, VP-materials at J K Tyres.
The Rubber Board had estimated a 10 per cent year-on-year increase in natural rubber production in the eight months to November 2019.
If the stock has not reached the market, it means the growers are holding it, industry insiders said.
But Josch Joseph, secretary at Consortium of Indian Rubber Growers Association, disagreed. “The growers do not have the capacity to hold for a long time,’’ he said.
Joseph said delays in payment of arrears under the Kerala government’s price incentive scheme seems to have discouraged small growers from going for tapping. “Most of them have stayed away from tapping as they have not got payment for the last 6-7 months,’’ he said.
The shortage is expected to get worse as the tapping season in the main producing state of Kerala is coming to a close. Rubber yield has already started falling with an increase in temperature, pushing prices up. Sheet rubber prices have risen 2 per cent in a week to ?137 per kg.
Since December, the tyre industry has been importing more rubber to bridge the demand-supply gap, which they expect to widen further in the coming days with the revival in the automobile sector. “We saw some positive signals in January and the demand was better than in the previous few months. We hope the trend to continue in the coming months,” said Pandey of JK Tyres, adding that the consumption is generally subdued in the last quarter of the fiscal year.
He said as the industry was better prepared to deal with the shift to BS-6 emission norms for vehicles, the demand was not affected that much. “Already several companies have started launching BS-6 vehicles,” he said.
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