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 Indian 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
Markets 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.
