India’s consumption of natural rubber is projected to rise by 4 per cent to 10.06 lakh tonne in the next financial year, according to the Rubber Board.
The production of the commodity in the country is also expected to increase by 4 per cent to 9.42 lakh tonne during the 2012-13 fiscal, Rubber Board Chairman Ms Sheela Thomas said in a statement.
According to the Board’s estimates, India will produce 9.02 lakh tonne rubber this fiscal, while consumption of the commodity is estimated at 9.66 lakh tonne.
Although, the board expects production-consumption deficit of natural rubber at 64,000 tonne, this would not lead to any shortage in the domestic market as the opening stock of rubber in April 2012 is projected at 2,30,000 tonne, the statement said.
Besides, the rubber consuming industry has entitlement to import more than 1,00,000 tonne of natural rubber through duty free channels, it added.
“Import and export of natural rubber for 2011-12 are projected at 1,70,000 tonne and 30,000 tonne, respectively.
Based on the above projections, the carryover stock at the end of March 2012 is projected at 2,30,000 tonne,” Mr Thomas said.
Mr Thomas noted that global rating agencies have cut the GDP growth forecasts of 2012 due to deepening economic strains in the euro-zone and fragilities elsewhere, while recovery in advanced countries is expected to begin only in the second half of 2012.
Despite the global economic uncertainties, natural rubber prices would not witness high volatility, she said.
Globally natural rubber production would decline in the coming months due to winter and dry season in major rubber growing regions.
Thus, tight world rubber supply position would continue irrespective of recent decline in rubber demand, she said.
As for India, it could have an increased demand in tandem with the expected economic growth. This will result in natural rubber stocks being almost consumed in the domestic market itself.