General
Characteristics
Natural Rubber (NR) is produced from latex
or field coagulam obtained from rubber trees planted in plantations.
The most important forms in which NR is processed and marketed
are the following: Sheets, Crepes, Block rubber and Preserved
Latex Concentrates. In India sheet rubber designated as RSS
1, RSS 2, RSS 3, RSS 4, RSS 5 are the most commonly produced
and marketed. Block Rubber is designated in the grades of
ISNR.
Global Scenario
- Thailand, Indonesia, India, China, Malaysia,
Vietnam are the major producers of rubber in the World.
- The global production fluctuates between
6-8 million tons, with a production of 7.9 million tons
in 2003, of which Asian countries have produced 6.76 million
tons.
- On the consumption front, global NR consumption
is 7.89 million tons in 2003, of which 1.9 million ton was
consumed in India and China alone. The total synthetic rubber
consumption in 2003 was 1.13 million ton.
- Around 60 % of the global rubber production
is used by the transportation sector. In this sector, natural
or synthetic rubber cannot be used individually and has
to be blended.
Major World Markets
Tokyo Commodity Exchange, Singapore Commodity
Exchange, Osaka Mercantile Exchange are the major exchanges
undertaking futures trading of rubber. Kuala Lampur, London,
New York are the major physical markets.
Indian Scenario
- India's rubber production in India
is around 6-7 lakh tons.
- Kerala accounts for 90% of India's
rubber production. The other producer is Karnataka.
- RSS (Ribbed Smoked Sheets) account
for 72% of the production and 45% of the imports. Block
Rubber accounts for 10% of the production and 40% of the
imports.
- The tyre industry, consumes 52 % of
the almost 7 lakh rubber produced in the country.
- Tyre is the major form in which rubber
is exported from India. India's tyre exports are around
Rs. 1200-1300 crores a year. Duty-free imports against the
advance licence scheme is permitted for re-export and rules
mandate that only 44 kg of natural rubber can be imported
against 100 kg of exports. India's imports vary between
years and is currently around 50000-60000 tons a year. Duty-paid
imports of natural rubber under open general license attract
20 % import duty.
Major World Markets
Kottayam, Kochi, Kozhikode and Kannur in Kerala are the major
primary markets.
Daily Price Volatility of RSS 4 Grade Rubber
at Kottayam in 2002-2004
| Daily
% Volatility |
<
1 |
1 -
3 |
>
3 |
| %
Occurrence |
78.95 |
19.74 |
1.32 |
Market Influencing Factors
- The rubber production fluctuates between
months and it is normally low during the rainy season.
- Growth in industrial production: automobile
industry.
- The ratio of utilization of domestic
production and imported rubber by tyre manufacturers.
- Government policies have a profound
influence on rubber prices. These include subsidies, restrictions
on ports etc.
- International rubber price movements,
have a slow influence.
- Stockists and speculators also play
a significant role in influencing prices.
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