By Rajendra Jadhav & Aniruddha Basu
MUMBAI, March 5 (Reuters) - India's natural rubber production dropped 4.3 percent in the first eleven months of 2009/10, pushing prices to a record high and forcing tyre makers to double imports, a senior Rubber Board official said.
Total output in April-Feb was 780,750 tonnes, compared with 816,200 tonnes a year ago, the official, who did not wish to be identified, told Reuters on Friday.
In 2009/10, output in the world's fourth biggest producer is expected to drop 4 percent to 830,000 tonnes from 864,500 tonnes a year ago, he added.
"Weather was not favourable. Adverse climatic conditions affected production."
In the second half of 2009/10 tyre makers raised purchases of natural rubber to meet booming demand from automobile industry, lifting the price of the most traded RSS-4 (ribbed smoked sheet) to a record of 14,350 rupees per 100 kg on Thursday.
The price has risen 8 percent in the last one month and 37 percent in the past six months.
A rally in rubber prices in overseas markets like Thailand and Japan during the period also underpinned sentiment, traders said.
Between April 2009 and January 2010, vehicle sales in India climbed 24 percent to nearly 10 million units, on a low base, helped by tax cuts and softening loan rates. See [ID:nSGE6170DO]
A sudden rise in demand and lower domestic output, however, forced the tyre industry to source more raw materials from overseas markets.
Rubber imports during April-Feb jumped to 158,000 tonnes from 71,000 tonnes a year ago, said the official, adding the country may import 10,000 tonnes in March.
"Demand for tyres is expected to be robust in the coming months as well. Rubber prices are also likely to remain high," said Sunam Sarkar, chief financial officer at Apollo Tyres (APLO.BO: Quote, Profile, Research), one of India's leading tyre makers.
In February domestic rubber consumption rose nearly 9 percent to 77,500 tonnes, Rubber Board said in a statement on Friday.
(Editing by Sunil Nair)
(in.reuters.com)
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