Global Economy

India's rubber output dented by heavy rains in Kerala, to lift imports

India’s natural rubber production is likely to fall sharply in October and November, as heavy rains have been disrupting tapping activity in the country’s top producing southern state of Kerala, industry officials said on Monday.

Lower production could force India, the world’s second-biggest consumer of natural rubber, to increase imports in the coming months from Indonesia, Malaysia and Thailand, supporting global prices.

Heavy rainfall has been disrupting rubber tapping since the last month. In October, we are expecting sharp drop in the production compared to September,” said George Valy, president of the Indian Rubber Dealers’ Federation.

India produced 67,000 tonnes of natural rubber in September, estimates the Association of Natural Rubber Producing Countries (ANRPC).

The production is likely to be lower in November as well, as the onset of north-east monsoon will bring heavy rainfall, but the output will recover from December onwards, he said.

Kerala received 117% more rainfall than normal so far in October, according to the weather department.

The supplies are constrained by labour shortage and as heavy rainfall has made tapping even rain-guarded trees difficult, said a rubber dealer N. Radhakrishnan.

Rain guards are typically pieces of plastic that surround a tree’s trunk above the tapping panel.

The slowdown in the production has been forcing tyre makers to increase imports, which are cheaper than local supplies, Radhakrishnan said.

India imported 46,000 tonnes of natural rubber in September compared to 40,500 tonnes in August, ANRPC estimates.

The imports in October could rise above 50,000 tonnes as heavy rainfall has created big gap between demand and supply, Valy said.

Tyre makers are not running their operations at full capacity since demand from Original Equipment Manufacturers has been affected by chip shortage, said a senior official with a tyre company, who declined to be named.

“Auto sales are falling because of chip shortage. The spillover impact has been affecting tyre and rubber producers as well,” the official said.


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