International prices of rubber have risen sharply in last few months. In rupee terms, it is at ₹143/kg, up from ₹116 in 2019-20. That said, domestic prices are quoting lower, currently at ₹134.40 which is almost the same levels of last year.
Rubber farmers in Kerala are thus disheartened.
The disruption in the operations of many consuming industries (especially the tyre manufacturers) following the Covid-led lockdown and dwindling sales of automobiles have led to a decline in demand for the raw material like natural rubber, affecting the growers, said Ajith BK, Secretary, Association of Planters of Kerala.
He added, “There is a fear among growers that there is a concerted effort by consuming industries through unregulated imports to further depress the domestic rubber prices in the cropping months between September and January.”
PC Cyriac, president, Indian Farmers Movement (Infam), accused the consuming industry for depressing the domestic prices, saying that they are doing it for the last many decades. When rubber prices are moving up globally, the industry starts importing to keep the stock in hand. This would give them an upper hand to dictate terms for procurement from the domestic market. BusinessLine could not independently verify the claim of cartel action in the rubber market.
Global prices
Natural rubber prices have not gone up in markets across the globe. It is only in Thailand, says KN Raghavan, Executive Director, Rubber Board. “It is only in Thailand that the price is up. The reason being shortage of labour as Bangladesh tappers went back to their homes in Myanmar and Cambodia because of Covid. The other factor for higher prices in Thailand is elections are due and rubber is a politically-sensitive commodity.”
It is expected that NR prices in domestic market would continue to hold firm as consumption activities have picked up in last two months. Tyre sector, which accounts for almost 67 per cent of domestic consumption, has seen a strong rebound after the lockdown.