The Rubber Board projects a rise in natural rubber production at 750,000 in 2019-2020. The production put it at 648,000 tonnes last fiscal. The tappable area has increased from 640,000 hectares to 665,000 ha in 2019-2020. The Rubber consumption in the year 2019-2020 is put at 127,000 tonne supported by the anti-dumping duty on tyre and higher import duty. The consumption has gone up from 111,2210 tonnes in 2017-2018 to 1211,940 tonne in 2018-19 which is good news for the rubber industries in Chennai, India.
The emerging demand-supply situation and high oil prices, dollar appreciation, devaluation of currencies and high inventory is pushing natural rubber prices further. The production potential factor is expected to stay unfavorable upto 2021 or further. The new planting and replanting is considerably slow since 2013. In 2012 676,000 hectares were planted in producing countries and the numbers are dwindling settling at 197,000 in 2017.
Decline in planting
Since 2013 the new plantations and replanting have come down drastically due to the lower price. Further on account of the 7 year gestation period there are fewer trees opened for tapping from 2022. The rising crude prices have left negative impact on the prices. The price of natural rubber depends on crude price and is largely speculative. The investors believe that high crude price is the result of high price of synthetic rubber leading to the substitution of synthetic rubber with natural rubber, this result in the high natural rubber price.
The Chinese NR consumption and the trade war concerns have hit the Chinese auto tyre industry. The devaluation of currencies of top natural rubber exporting countries has made exporters more competitive in the export market. The rubber production has increased 6.6% to 10.39 million tonnes between January-September and had reached 13.89 million tonnes by the end of 2018. Meanwhile the consumption has increased by 6.6% and is estimated to be 14.21 mt from the existing 10.65 mt.
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