Satellite survey to discover potential NR cultivation area

The Rubber Board of India and Indian Space Research Organisation are conducting satellite imagery surveys to discover prospective areas for natural rubber cultivation.

While addressing the press persons, Additional Rubber Production Commissioner - K.G. Mohanan said yearlong satellite based imagery study being conducted jointly by the Rubber Board, Indian Space Research Organisation and Rubber Research Institute of India, is firstly being done in Tripura. After getting the outcome of the survey, which is expected to be known in two months, the satellite imagery survey would be conducted in other parts of India to learn the potential area of natural rubber cultivation.

Read lot more in Rubber4U – 1st July 2012 issue

Cut in petrol prices

Public sector oil companies are likely to cut the price of petrol by `.2.50 to `.2 a litre, as global crude oil rates have declined. After an unprecedented hike of `.7.54 in the petrol price on 23<sup>rd</sup> May, state oil companies had rolled back the price by `.2 on 2^nd June, as the international price of petrol has come down, to which domestic prices are linked.

Read lot more in Rubber4U – 1st July 2012 issue

NR weaken due to lack of demand and rising supplies

Automobile industry is the only consumer of tyres. The automobile industry has slumped with passenger car sales grinding to low single digit growth in 2012 due to hike in excise duty, increase in fuel prices, hardening interest rates and sluggishness in the economic environment. Car companies have, in recent times, announced production cuts to battle the demand slump and discounts and promotional packages are ruling the market to attract consumers into buying new cars.

The debt crisis in Europe and slowing growth in China are clouding market sentiment and has raised concerns that demand for rubber may slow. Dealers expect rubber consumption from tyre makers to drop in the coming months on lower demand from auto sector. Natural rubber prices in India are likely to weaken due to lack of demand and rising supplies and on the other hand Thailand’s plan to intervene in the market is seen limiting the downside in the international market. For the past few months tyre makers are buying less than normal from domestic market due to availability of rubber from imports. India's natural rubber imports in May rose to 18,419 tonnes from 16,293 tonnes a year ago. Now local supplies are improving due to rainfall in Kerala. Rubber experts expect the soft prices to continue globally for a while so tyre companies can look forward to some relief in their main raw material.

Today, in Kottayam, RSS-4 grade prices have closed at `.186.50 per kg. and RSS3 grade closed at `.185.93 a kg at Bangkok.

Read lot more in Rubber4U – 1st July 2012 issue

Impose anti-dumping duties on cheaper rubber products

Import of finished rubber products from China and the nearby countries is threatening the existence of small non-tyre manufacturing industry in India. Small rubber units manufacturing products like balloons, gloves, latex foam, rubber mat and sheets have either closed down their operations or are on the verge of closure.

The imports of cheap finished rubber products have been on a rise during the past few years. These articles have been largely coming from China, Taiwan, Thailand and Korea. These products, after all the freight and landing charges are quite cheaper than Indian finished products. We have heard that the governments in these countries are very pro-active towards exports and provide the exporting units with subsidies and incentives that make the end product cheaper than the Indian goods, said Vinod Simon, president of All India Rubber Industries Association.

According to All India Rubber Industries Association, 30-40% of small rubber units are under serious threat. Industry insiders believe that around 15-20% such units have already closed operations and another 10% was in process of doing so. Hence, All India Rubber Industries Association has asked the government to impose anti-dumping duties on these cheaper rubber products.

Read lot more in Rubber4U – 1st July 2012 issue

RSDC to start operations soon

Speaking to reporters on the sidelines of National Rubber Conference at Chennai, All India Rubber Industries Association (AIRIA) president - Vinod Simon said, a company under the name Rubber Skill Development Centre (RSDC) has been formed and the office will be ready by July end. While in the long term it plans around 150 institutes across the country to be affiliated with RSDC to develop skills for the industry.

The joint venture between All India Rubber Industries Association and National Skill Development Corporation (NSDC), to develop skilled manpower for the rubber industry sector is expected to start the pilot project in six to eight institutes by September. NSDC would impart `.5 crore to RSDC for the project, both AIRIA and Automotive Tyre Manufacturers' Association (ATMA) each has 10% equity of each, and investment of `.25 lakh each into the centre.

Read lot more in Rubber4U – 1st July 2012 issue

Industry demand duty free import to fill up widening gap

The widening gap between supply and demand in the local market was the main reason for the sharp rise in imports. In May, production was just 58,000 tonnes, while consumption edged up to 83,000 tonnes, leaving a gap of 25,000 tonnes over the two months. In April and May, rubber-based industries, especially tyre companies, imported 35,298 tonnes as against 22,811 tonnes in the same period of the previous year.

With natural rubber production expected to fall short of the domestic consumption for the second year consecutively, the rubber industry wants the Centre to permit duty-free imports, at least to the extent of the deficit.

While addressing the reporters on the sidelines of a two-day national rubber conference, All India Rubber Industries Association, President - Vinod Simon, said such a measure was imperative since the shortfall this year would be 75,000 tonnes. It was 65,000 tonnes last year. 

The Thai government has only bought 5,000 tonnes of rubber sheet under an intervention scheme that started in early May with the aim of helping farmers. Agriculture officials from Thailand will be meeting Malaysia’s Minister of Plantation Industries and Commodities, Bernard Dompok, at the end of June to discuss support measures for natural rubber. The two countries will discuss natural rubber prices, which have fallen sharply due to global macroeconomic concerns.

Read lot more in Rubber4U – 1st July 2012 issue

Rubber’s downtrend continues

In tune with the gloomy global economic sentiment which has spread wide around the globe. With a stalling Chinese economy, a quickly falling economic growth rate in India, Greece and Spain continuing to remain in the economic doldrums and France in a disturbed polity, commodities including rubber gave no clear clue as to where they are heading.

Besides the quick declining Indian economy and fears of the dire straits of Spanish finances there are increasing signs and signals now that the global economic recovery is tottering in no uncertain terms.

Rubber stockpiles in China’s Qingdao port, the main shipment hub are starting to expand as demand slows. Natural rubber continued to remain under pressure in international markets. Weak manufacturing data from China pulled down the TOCOM market. TOCOM rubber futures dropped to a six-month low on lingering worries on the Euro Zone debt crisis and strong yen, raising further concerns over the demand for the commodity. It now looks to test further on the downside with a target of ¥240 at TOCOM and on the other hand in India it is expected to reach around `.178 per kg., in short period.

China’s tyre and auto markets have yet to come to terms with a scenario where Chinese demand is diminishing faster than anticipated. Weak auto sales in China, especially falling sales of trucks, coincide with a lackluster market in the U.S. and Europe may lead to a surplus of the commodity. According to the industry sources, oversupply and weak demand are putting pressure on the synthetic rubber prices and are expected to fall further during the current month.

The growth of India's industrial production, which had declined by 3.5% in March 2012, just about managed to stay in positive territory at 0.1% in April as compared to the level in the same month of last year.

In India, natural rubber production declined by 5% to 1.10 lakh tonnes in the April—May period from 1.16 lakh tonnes in the same period of the 2011—12 fiscal. Consumption grew marginally by 1% to 1.63 lakh tonnes against 1.61 lakh tonnes in the same period of 2011—12.

Natural rubber import rose by 13% to 18,419 tonnes last month from 16,293 tonnes in the year—ago period, whereas exports fell by 63% to 1,131 tonnes against 3,031 tonnes in the same period last year. The stock of natural rubber in the country at the end of May 2012 stood at 2.22 lakh tonnes.

Read lot more in Rubber4U – 15th June 2012 issue

Moderate gain seems today

Natural rubber in the Indian markets weakened and RSS4 grade rubber in the spot market was quoted at its lowest since April end while in the future market, prices gained. Selling momentum gathered pace in the local market, as rise in petrol prices and a decline in GDP growth to 5.3% in the fourth quarter of 2011-12. Anticipation of higher imports due to lower prices in the international market increased in arrivals amidst lackluster demand is likely to build further pressure on rubber prices.

At NMCE, a weakening trend in rubber futures was noticed on Tuesday with June contracts dropping to `.188.11 per kg. On Wednesday, June contracts gained to `.191.03 per kg. July contract closed at `.193.02 and November closed at `.190.78 per kg. In Kochi and Kottayam, the two key rubber markets in India, RSS-4 prices have been continuously falling and finally closed at `.191.50 per kg. and RSS3 grade closed at `.193.39 a kg at Bangkok, on Wednesday. TOCOM futures, the June series were currently trading at ¥254, July at ¥254.5, August at ¥255, September at ¥254.4, October at ¥253 and November at ¥247.8 as on 7^th June 2012 at 12:20 JST.

Read lot more in Rubber4U – 15th June 2012 issue

Annual Supplement to FTP 2009-14

The Foreign Trade Policy 2009-14 was announced on 27th August 2009 in the backdrop of a fall in India’s exports due to global slowdown. The objective of the policy was to arrest and reverse the declining trend of exports as well as to provide additional support especially to those sectors which were hit badly by recession in the developed world.

In the wake of contraction of global demand and impending Euro zone crisis, the Indian industry and the export sector have warmly welcomed the annual supplement to the FTP 2009-14, a seven-point agenda to help the export sector, which has been facing demand contraction in the global markets, announced by Commerce & Industry Minister Anand Sharma.  

A seven-point strategy to boost exports in the annual supplement to foreign trade policy 2009-14 includes: to give a focused thrust to employment intensive industry; to encourage domestic manufacturing for inputs to export industry and reduce the dependence on imports; to promote technological upgradation of exports to retain a competitive edge in global markets; to persist with a strong market diversification strategy to hedge the risks against global uncertainty; to encourage exports from the North Eastern region; to provide incentives for manufacturing of green goods recognising the imperative of building capacities for environmental sustainability; and to endeavour to reduce transaction cost through procedural simplification and reduction of human interface.

The year ahead is full of challenges, current challenges are very disturbing. It will take time for demand to return to pre-crisis levels. It is our expectation that with these measures, we shall be able to sustain an annual export growth of 20% this fiscal, said the Commerce & Industry Minister. India's exports grew by 21% in 2011-12 to touch USD 303 billion.

Read lot more in Rubber4U – 15th June 2012 issue