Explained | The fall in natural rubber prices in India

Source: The post is based on the article “Explained | The fall in natural rubber prices in India” published in The Hindu on 14th September 2022.

What is the News?

After a moderate post-pandemic revival, the price of Natural Rubber(NR) has crashed to a 16-month low of ₹150 per kg in the Indian market. 

Where does India stand currently in the production and consumption of Natural Rubber?

India is currently the world’s fifth largest producer of natural rubber. It is also the second biggest consumer of natural rubber globally.

About 40% of India’s total natural rubber consumption is currently met through imports.

The auto-tyre manufacturing sector accounted for 73.1% of the total quantity of natural rubber consumption.

Why have Natural Rubber prices fallen sharply?

The current fall in prices is attributed primarily to weak Chinese demand and the European energy crisis, along with high inflation and an import glut, among other things.

How does the fall in Natural Rubber prices affect growers?

The fall in Natural Rubber prices has mostly impacted the small and medium-scale growers and has left them staring at an uncertain future, forcing some to stop production for the time being.

This impact is mostly seen in Kerala which accounts for nearly 75% of the total Natural Rubber production.

How has the Rubber Board reacted to this?

Rubber Board is an organization constituted under the Rubber (Production and Marketing) Act, 1947 and working under the aegis of the Ministry of Commerce & Industry.

The Rubber Board is currently optimistic as it regards the price fluctuation as cyclical and rests its hopes on the projections of a remarkable shortage of rubber seven years from now.

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