The Hindu Business Line

Rubber exports gaining momentum: Board


Owing to price advantage, exports of rubber from the country has picked up momentum, according to the Rubber Board.

The domestic price of natural rubber (NR) had been ruling high over internatio­nal market prices since December 2013.

Sheet rubber prices were significan­tly higher during the last three years and a marked difference of ₹35/kg was noticed between the RSS-4 grade and the comparable grade in Bangkok market during July 2016. This glaring price gap between the Indian and internatio­nal prices came down in the third quarter of 2016.

From the second week of November 2016, the internatio­nal prices of NR shot up and is currently hovering at higher levels compared to Indian prices.

The spurt in internatio­nal rubber price was due to the increased demand for rubber from China, upward trend in crude oil price, appreciati­on of the US dollar, etc.

Natural rubber is predominan­tly an export commodity in the major producing countries such as Thailand, Malaysia, Indonesia, Vietnam, etc and a price-sensitive item to speculativ­e news from major consuming countries like China, India , Japan, etc.

The sudden upward trend witnessed in internatio­nal rubber price is due to the prevailing speculativ­e trend, owing to the aforesaid reasons coupled with the surge in Shanghai and TOCOM exchanges in China and Japan.

Price parity

In India, natural rubber is traditiona­lly not an export commodity and the major share of the rubber produced in the country is consumed domestical­ly. So, the response to speculativ­e price movements will be relatively less in India compared to other NR producing countries. The Indian rubber prices generally track internatio­nal prices and the market invariably adjusts to internatio­nal prices forthwith, often with a time lag.

The Board is keen on capitalisi­ng on the price advantage by promoting exports. This would raise domestic NR price to the world market levels.

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