Domestic rubber production increased six per cent in January. However, the Rubber Board officials said that the primary reason for the rise last month was due to a lower base as production in January 2009 was far lower, mainly due to adverse weather conditions. Rubber output for January this year was 97,500 tonnes (91,900 tonnes).
Production in February and March is expected to drop as most of the rubber trees shed their leaves and tapping operations come to a halt. Evey year, January is the month when rubber stocks are at their highest levels, and they begin to dip in the succeeding months as consumption overtakes production. Consumption of rubber was lower than production in January this year as well.
Consumption in January was 79,500 tonnes that resulted in an addition of 18,000 tonnes to the country's inventories. Production for the first 10 months of the current fiscal was down five per cent at 7,29,250 tonnes.
Meanwhile, consumption for the first 10 months was up 6.6 per cent at 7,73,815 tonnes, leaving a deficit which has been bridged by imports.
Imports
Rubber imports were up 114 per cent at 1,46,653 tonnes till January. Imports in January were 6,553 tonnes. As the domestic demand continued to outstrip supply, exports plunged 69.8 per cent to 12,912 tonnes during April-January period.
Exports during January stood at 2,480 tonnes. Although rubber stocks stood at 2.8 lakh tonnes, they are bound to be eroded from their current high levels as the lean season has begun.
Target
Prices are also expected to rule firm as arrivals start declining. However, they are not expected to be capped as adequate stocks have been built for the coming months.
Going by the trends so far, the country is not expected to reach the revised production target of 8.4 lakh tonnes set for the fiscal.
Rubber production target for 2009-10 was 8.67 lakh tonnes. In view of the adverse weather conditions and production shortfalls, the target was scaled down.
(Source: irco.biz)
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