Rubber Board Chairman Sheela Thomas has predicted relative price stability in the internal NR market in the year ahead.
Addressing the 167th meeting of the Rubber Board at the Rubber Research Institute of India (RRII) here on Thursday, she said there would not be much fluctuation in the natural rubber (NR) price, even though many of the major rubber consuming nations were still under the shadow of economic uncertainties.
She pointed out that international agencies have slashed GDP growth forecasts of 2012 on intensification of economic strains in the Euro Zone and fragilities elsewhere. Recovery in advanced countries is expected to begin only in the second half of 2012. However, the US is projected to continue to grow by 1.8 per cent in 2012 as in 2011.
Developing Asia would grow by 7.3% in 2012 as compared to 7.9% in 2011. Oil price is projected to be around USD 100 per barrel in 2012. The substantial relative price advantage of SR from 2010 also narrowed during the recent months. NR production would decline in the coming months due to wintering and dry season in major rubber growing regions. Thus world NR supply tightness would continue irrespective of recent decline in NR demand. India’s position is stronger owing to the growing domestic demand in tandem with the expected economic growth and NR here is almost fully consumed in the domestic market itself, she added.
The domestic production of NR, from April to December 2011, increased by 4.3% as compared to the same period in the previous year. Meanwhile, NR consumption during April-December 2011 increased only by 1.2% as compared to the corresponding period in the previous year on account of the lacklusture performance of the non-tyre sector. NR consumption in tyre sector increased by 5.7 per cent whereas NR consumption in non-tyre sector declined by 6.3per cent.
Monthly NR consumption, which remained below that of the previous year from August to October, recovered from November 2011. According to Automotive Tyre Manufacturers Association (ATMA), tyre production and export increased by 7% and 25 per cent respectively during April-November 2011 over the same period in the last year, she added.
Production and consumption of NR for the year 2011-12 are projected at 902,000 tonnes and 966,000 tonnes respectively. Import and export of NR for 2011-12 are projected at 170,000 tonnes and 30,000 tonnes respectively. Based on the above projections, the carryover stock at the end of March 2012 is projected at 230,000 tonnes.
Production and consumption of NR in 2012-13 are projected at 942,000 tonnes and 1006,000 tonnes respectively. Thus the production-consumption balance indicates a deficit of 64,000 tonnes. However, there will not be any shortage of NR in the domestic market in 2012- 13, as the projected opening stock of NR in April 2012 is 230,000 tonnes and as the rubber consuming industry has entitlement to import more than 100,000 tonnes of NR through duty free channels.
International Rubber Study Group (IRSG) had forecasted world production and consumption of NR at 10.86 and 10.99 million tonnes with a deficit of 131,000 tonnes in 2011. World NR production and consumption in 2012 would be 11.42 and 11.49 million tonnes with a shorter deficit of 77,000 tonnes. However, deficits/surpluses of these magnitudes are not significant in leading the NR market to any direction when the total volume of production/consumption and stock are considered, Chairman informed the Board.