Rbr Poised for Record Glut as Shippers End Curbs	18 Jun 2013
Rubber Poised for Record Glut as Shippers End Curbs: Commodities By Aya Takada and Supunnabul Suwannakij June 18 -- Rubber is headed for the biggest glut on record, prolonging the bear market that began in April, as supply exceeds demand for a third year and Southeast Asian exporters ended curbs on shipments. The surplus will expand 57 percent to 490,000 metric tons this year, enough to meet U.S. demand for six months, according to RCMA Commodities Asia Group, the Singapore-based company that has traded rubber for nine decades. Futures in Tokyo, a global benchmark, will drop at least another 5.1 percent to 225 yen a kilogram ($2,376 a ton) by the end of December, according to the median of 16 analyst estimates compiled by Bloomberg. Five anticipate 200 yen, a price last seen in 2009. Thailand, Malaysia and Indonesia, representing about 70 percent of supply, failed to agree on new curbs at a meeting last week after reducing exports by 300,000 tons in the six months through March. While record global car production signals rising demand for tires, that won’t end the glut caused by farmers expanding output by 18 percent in three years after prices more than doubled since the end of 2008. There isn’t enough demand out there to absorb the surplus, said Kazuhiko Saito, the chief analyst at Fujitomi Co. in Tokyo who has covered the market for almost a quarter century. We’re going to see an influx of rubber unless governments intervene as production from Southeast Asia moves into high gear. Raw Materials Rubber fell 22 percent to 237.2 yen on the Tokyo Commodity Exchange, or Tocom, this year and is now 56 percent below the record 535.7 yen reached in February 2011. Lower prices should reduce costs for Bridgestone Corp., Michelin & Cie. and Goodyear Tire & Rubber Co., the biggest tiremakers. The Standard & Poor’s GSCI gauge of 24 raw materials dropped 2.5 percent since the start of January and the MSCI All- Country World Index of equities climbed 7.8 percent. Treasuries lost 1.2 percent, a Bank of America Corp. index shows. RCMA Commodities Asia was anticipating a 2013 surplus of 353,000 tons in March and increased its estimate because of signs that demand in China, Europe and the U.S. is weakening. The International Rubber Study Group also may need to increase its forecast for a 179,000-ton glut because consumption is weaker than anticipated, said Lekshmi Nair, a senior economist at the Singapore-based group. The 35-nation body said in January that demand would rise about 6 percent to 11.6 million tons and production 3.2 percent to 11.8 million tons. The new forecast will be released next month, Nair said. New Measures Thailand, Malaysia and Indonesia also failed to extend their export curbs at a meeting in April. Tokyo futures had already plunged more than 20 percent from this year’s high of 337.8 yen in February by then. Officials from the International Tripartite Rubber Council met again June 12 and 13 without deciding on any new measures. Thailand had sought to reverse the slump by unilaterally extending its export restrictions for 60 days. While that helped futures rally to 299 yen by May 13, the slump resumed before the additional curbs ended. Thai export prices fell 13 percent to 86 baht a kilogram ($2,801 a ton) this year from the peak of 198.3 baht in 2011, according to data from the Rubber Research Institute of Thailand. The imbalance between supply and demand may be superseded in Tokyo trading by moves in the yen, which reached a four-year low last month against the dollar amid the Bank of Japan’s monetary stimulus measures. A weaker yen increases the appeal of futures denominated in the currency and was the main reason why the Tocom rubber contract jumped 20 percent in less than four weeks from the middle of April, said Makoto Sugitani, head of sales at commodity broker Newedge Japan Inc. Yen Weakens Price swings in futures have doubled since February to the highest level in 18 months, increasing the challenges for forecasters. Predictions in the Bloomberg survey of analysts ranged from 200 yen to 400 yen. The yen is forecast to average 105 to the dollar in the fourth quarter, a depreciation of 11 percent from now, according to the median of 74 analyst forecasts compiled by Bloomberg. Rubber futures in Tokyo will rally again if the yen resumes its decline, said Tokyo-based Sugitani, who correctly predicted in October that prices would advance 10 percent by the end of 2012. The yen is the biggest factor in determining the direction. Tocom futures dropped 4.4 percent last week as the yen rallied the most since July 2009, with investors reassessing the BOJ’s stimulus. Growing Cycle Rubber production is expanding as trees planted from 2006 to 2008 become mature enough for tapping this year, said Kona Haque, an analyst at Macquarie Group Ltd. in London. Rubber rallied 23 percent in Tokyo in 2006 and 2007, encouraging more planting. Futures doubled in 2009. China, the largest buyer, will import 14 percent less in the seven months ending in December than a year earlier, the Association of Natural Rubber Producing Countries estimates. Purchases are slowing after shipments jumped 27 percent in the first five months of the year, according to the Kuala Lumpur- based group, whose members represent about 93 percent of supply. Inventories in Qingdao, China’s main hub, reached a record 371,100 tons on April 26, according to Cai Zhiwei, the general manager at the Qingdao International Rubber Exchange Market. Stockpiles were 350,700 tons on June 14. China accounts for 33 percent of global demand and tires represent 70 percent of natural-rubber consumption in the country, according to exchange’s estimate. Heavy Industry While demand will increase this year for tires used for passenger vehicles in China, the world’s largest automobile market, it will slow for large trucks as the government shifts its focus from heavy industry to more consumption-driven growth, Shen Jinrong, chairman of tiremaker Hangzhou Zhongce Rubber Co., said in March. A tire for a medium or heavy commercial vehicle uses as much as 18 kilograms (40 pounds) of natural rubber, while those for passenger cars contain less than 1 kilogram, according to CLSA Asia-Pacific Markets, a brokerage in Hong Kong. Global automobile sales will rise above 83 million units to a record this year, according to LMC Automotive Ltd., a research company in Oxford, England. Bridgestone, the biggest tiremaker, used 450,000 tons of natural and synthetic rubber in the first quarter, 4.3 percent less than a year earlier as Japanese and U.S. demand weakened, the Tokyo-based company said May 8. The company still expects to consume a record 1.93 million tons this year, said Makoto Shiomi, a spokesman for the company. We’re quite negative unless there is government intervention, said Chris Pardey, RCMA’s chief executive officer and a former commodities trader at Cargill Inc. and Noble Group Ltd. Demand estimates for Europe, China and now also the U.S. are falling. (Source: Bloomberg)

Kerala coop body seeks ban on rubber imports

Kerala coop body seeks ban on rubber imports

Kochi, Dec 18:  The Kerala State Cooperative Rubber Marketing Federation (RubberMark) has called for steps to impose a total ban on import of rubber as well as encouraging exports by extending subsidy.

T.H. Musthaffa, President, RubberMark, said that the quantity of rubber produced in Kerala is sufficient for domestic consumption and there is no need for import under any circumstances. The production in the last financial year was 9.04 lakh tonnes and consumption during the period was 9.64 lakh tonnes.

Out of this, 48,200 tonnes were exported.

Up to August, 2,13,785 tonnes were imported, he said and stressed the need to take steps for exporting the surplus quantity over own consumption.

In a memorandum submitted to the Union Commerce Ministry, Musthaffa pointed out that the fall in rubber price is the result of RSS IV and ISNR 20 to help rubber companies.

It is only because of the pressure from tyre companies rubber imports were being allowed.

It is significant to note that when the price of rubber was in the downward trend, prices of tyres have not declined and in turn, they had gone up, he added.

Prices of RSS IV, which was Rs 201 a kg in April has come down to Rs 160 in December.

The price of crumb rubber also declined from Rs 198.50 to Rs 159 during the same period.

When the prices were ruling high, rubber growers extended wages hike and other benefits to workers.

However, it is not possible to reduce these benefits, while the price realisation has come down. Moreover, the increase in fertiliser costs also added to the woes of rubber growers, he said.

The Federation also requested the Ministry to grant a short term loan of Rs 50 crore as a need-based working capital and Rs 1 crore each to the member societies to reinforcing the cooperative marketing set up.

(Source: The Hindu BusinessLine)

	28 Dec 2012
Rubber Board sees India FY13 imports topping estimates --Rubber Board head: FY13 rubber imports seen over 200,000 tn --Initially pegged FY13 rubber imports at 160,000 tn --India FY12 rubber imports were at 217,000 tn --FY13 rubber export seen below 40,000 tn estimate --Exports down due to weak global prices --FY13 rubber output estimate cut to 930,000 tn --FY13 rubber output earlier pegged 942,000 tn --FY13 rubber consumption seen 1.06 mln tn --FY13 rubber supplies adequate to meet demand --FY13 end rubber stocks seen up at 270,000 tn --Aiming 24,000 ha more area under rubber FY13 --Aim 23,000 ha more area under rubber in FY14 --750,000 ha under rubber plantation in FY12 India's natural rubber imports in the current financial year ending March are likely to top the Rubber Board's estimates, but may still fall marginally short of last year's level. The country is likely to import over 200,000 tn natural rubber in 2012-13 (Apr-Mar), compared with 217,000 tn a year ago, Rubber Board Chairman Sheela Thomas said. "(Our) import projection was 160,000 tn (for the current financial year). But the present trend shows that it would be higher than this estimate... It is possible that our imports may cross 200,000 tn this year," Thomas told NewsWire18 in a telephonic interview. According to latest Rubber Board data, India imported 22,748 tn rubber in November, as against 16,125 tn a year ago. During Apr-Nov, the commodity's imports had risen over 32% on year to 153,855 tn. Asked whether rubber imports are likely to top last year's 217,000 tn, Thomas said, "Last year, it was 217,000 tn. I can't say (whether) it would cross last year's level, but largely it would be line with last year." Asked for the reason behind rubber imports topping expectations, she said: "(Around) 50% of imports are under advance licences, and for the rest they (importers) have to pay duty. We are not able to understand why they are resorting to (imports). They should buy from domestic market." Industry experts and tyre companies say it is cheaper to import rubber rather than procuring it from the domestic markets, as global rates are lower. Thomas said so far in the current financial year, domestic prices have averaged around 185 rupees a kg compared with an average of 178 rupees in the global markets. Thomas said global rubber prices have been weak for most of the year due to the global economic slowdown, which has led to shrinking demand. India's natural rubber exports were around 58% lower on year during Apr-Nov at 9,179 tn. "We have been projecting export of 50,000 tn for last few years, but we have not touched that so far. So we had reduced that target to 40,000 tn for this year. We might not reach that (target also)," Thomas said. She said exports are not lucrative because of weak global prices. India, the fourth largest rubber producer in the world, typically exports rubber to Europe, Japan, Malaysia, Turkey and the US. Iran is also a very good market for Indian rubber exports but because of the payment issue, sales have not been very robust to the West Asian country, Thomas said. Iran is also a very good market for Indian rubber exports but sales here have not been very robust due to issues in payment, she said. These issues have cropped up following western countries' sanctions on the West Asian nation over its nuclear programme. OUTPUT, CONSUMPTION India's natural rubber output is now seen declining to 930,000 tn in the current financial year due to a fall in production over the past few months, Thomas said. "(Output) Projection is 930,000 tn for the current financial year. At the beginning of this year, we had projected 942,000 tn, but there was a dip in production for few months. Therefore, we have revised the production estimates," she explained. India's natural rubber production in 2011-12 had risen 4.3% on year to 899,400 tn. The fall in production notwithstanding, there would be enough supplies in the country to meet the projected consumption of 1.06 mln tn, Thomas said. "Though, consumption is higher than production, we would have lot of stocks and imports. We started the year (April) with a stock of 230,000 tn. We would end this year (March) with a stock of 270,000 tn because of more (higher) imports," she said. In 2011-12 (Apr-Mar), the country's rubber consumption had risen nearly 2% on year to 966,215 tn. PLANTATION PUSH Thomas said the Rubber Board has taken up planting activities in a major way and is eyeing plantations in non-traditional areas. "We are trying to expand rubber production in the northeast, parts of West Bengal, Odisha, Andhra Pradesh, Maharashtra and Karnataka. Target for this year 23,000 ha for new planting and 10,000 ha for replanting," she said. Thomas said there has been a lot of rubber planting post-2002, so most of the trees are young. "So we don't have to worry about the recovery and yield. This year also there will be considerable replanting of rubber plants and it gets rejuvenated. Therefore, condition of plants is not a matter of concern as of now," she said. She said, the total area under rubber plantation in 2011-12 was 750,000 ha and the Board has targeted an additional 24,000 ha of new plantation and 17,000 ha under re-planting in the current financial year. The life span of a rubber tree in a plantation is 32-35 years, of which about 25 years constitute the productive phase. "Projection for 2013-14 replanting is 15,000 ha, and new planting is 23,000 ha. The projection for 2013-14 is less due to sufficient old plantings," Thomas said. (Source: NewsWire18) Rubber industry demands cut in raw materials duty Kochi Dec 27, 2012, 00:19 IST: The rubber industry has sought lower import duty on raw materials such as butyl rubber and hi-tech synthetic rubbers, while it wants the duty on finished products to be kept high. A pre-Budget plea by the All India Rubber Industries Association (AIRIA), has asked for reduction in customs duty on natural rubber (NR) from the current 20 per cent or Rs 20 a kg to 7.5 per cent or Rs 10 a kg, whichever is lower. NR is the major raw material for Indian rubber industries, accounting for 35-45 per cent of raw material cost. At the current international price of Rs 160 a kg of NR, the import duty of Rs 20 works out to around 12.5 per cent, much higher than the import duty on finished rubber products at 10 per cent, leading to an inverted duty structure. China has just reduced the import duty on NR from a maximum of 1,600 yuan currently to a maximum of 1,200 yuan effective January. At the current international price of around 25,000 yuan tonne, the import duty comes to just about five per cent. The Indian industry needs a level playing field to be competitive, said Niraj Thakkar, president of AIRIA. In view of the high rate of import duty, ranging from 20-70 per cent, on most raw materials, the cost of finished goods made from such imported raw materials is higher than the landed cost of such imported finished goods. This leads to imports of finished goods from neighbouring countries, causing injury to domestic producers, Thakkar added. AIRIA estimates the demand-supply gap in NR at over 150,000 tonnes in the next ffinancial year. The industry body has sought permission for duty-free import of 100,000 tonnes to bridge this gap. It has also asked for allowing NR import under the Asean free trade agreement on reduced customs duty, in line with the concessional tariff on finished products. This is a pre-condition for providing a level-playing field for local rubber-based units. There are more than 6,000 units in India, most of which are facing a crisis situation due to increase in raw material cost and import of cheap products from countries such as China. The surge in cheap imported rubber products from China and other countries is an area of concern for the Indian rubber industry. With over 35,000 rubber products, it is difficult to prove the dumping charges and most of the manufacturers being small, they do not have the resources to initiate anti-dumping proceedings in accordance with the law. On the other hand, levy of anti-dumping duties on carbon black and rubber chemicals, major raw materials for the industry, has made Indian rubber products expensive, compared to imported finished products. AIRIA said the import of even raw materials is subjected to high rate of customs duty, making it difficult for the industry to survive and to compete against import of finished products. Therefore, AIRIA has asked for waiver of customs duty on raw materials not manufactured domestically such as butyl rubber and other hi-tech synthetic rubbers. The industry body has also asked for reduction of customs duty on raw materials where domestic production lags consumption, like raw materials such as poly buetadine rubber, nylon tyre cord fabric and steel tyre cord, among others. Import duty on latex continues to be a staggering 70 per cent and has been only recently capped at Rs 49 per kg. However, latex being a wet form of NR, the duties should be comparable to natural rubber. The high customs duty structure on raw materials has gravely affected the industry and in many cases, it has led to lower capacity utilisation or even closure of units manufacturing rubber products. According to available reports, as many as 294 units manufacturing rubber products have shut shops over the past five years. Moreover, the number of rubber product manufacturers who have shut down production is the highest in the category that consume lower quantity of rubber (less than 100 tonnes). (Source: Business Standard) Tyre industry against import curbs on rubber Kochi, Dec. 23: The tyre industry has opposed imposing import curbs on rubber, saying that it will be counter productive. The import curbs will have far reaching adverse consequences for the industry already facing the onslaught of unprecedented slowdown in the automobile sector. The Automotive Tyre Manufacturers Association (ATMA) said in a statement that the demand raised by rubber growers also does not corroborate with the facts. High domestic prices An analysis of domestic (RSS 4) and international (RSS 3) prices shows that domestic prices have ruled higher than international prices over the last six months except in December. Even when compared with Malaysian SMR 20, which is a competing grade of rubber with RSS 4, domestic rubber prices are still ruling higher. The consumers have been at the receiving end of comparatively higher domestic prices for a major part of the year. Any knee jerk reaction could have disastrous consequences for the tyre industry which is already facing the prospects of low tyre demand in view of de-growth in automobile production, Rajiv Budhraja, Director-General, ATMA, said. According to him, the domestic prices have ruled higher due to domestic demand outstripping availability making imports imperative. Volatile futures ATMA has put the blame on volatility in rubber prices on futures trading. The futures in December have dropped from Rs 167 to Rs 158 a kg within a week, while international prices have risen from Rs 170 to Rs 173. The Association also suggested market intervention, through Rubber Board or any other designated agency such as STC, till prices are perceived to be in the vicinity of international prices. (Source: The Hindu BusinessLine)

India: Increase in rubber tax mooted

India: Increase in rubber tax mooted

RENTON CAMPOY DECEMBER 30, 2012 0Thiruvananthapuram: Rubber farmers in the state, according to the Public Expenditure Review Committee, are having it easy. The tax revenue contributed by the rubber sector has been described by the Committee as “dismal” though rubber commands the most remunerative prices among agricultural commodities. The Committee’s observation is widely seen as a signal to the state to increase the tax on rubber in the coming budget.“Rubber recorded sustained, sometimes steep, increases in its price throughout,” the Committee says iits report. “At the same time, the sales tax revenue realised from rubber declined drastically and continuously. Accelerated increase in the value of output is not reflected in the tax collected,” it adds.The value of rubber output shot up to Rs 14650 crore in 2010-11 from Rs 8566.01 crore in 2009-10, a 71 per cent increase. The sales tax/VAT collected in 2010-11 was 297.81 crore as against Rs 196 crore in 2009-10. But as a percentage of the value of output, the tax collection had dropped to 2.03 per cent in 2010-11 from 2.29 per cent in 2009-10. While the value of rubber output soared, the tax collection crawled as a southward sloping line along the base.Source: deccanchronicle.com

Rubber prices to remain weak in 2012-13 on weak demand: Rubber Country

Rubber prices to remain weak in 2012-13 on weak demand: Rubber Country
August 23, 2012




Fundamentals are not supportive of rubber as global production has risen in recent years while demand has fallen in major consuming countries. This is the reason why Thailand, Indonesia and Malaysia who account for 70% of global output have taken drastic measures in 2012 to stem the fall in prices.

KOCHI, INDIA (Commodity Online): Rubber prices in India have fallen steeply from a high of Rs 240 per kg for RSS 4 grade in 2011 to below Rs 170 per kg in August 2012 while rubber futures at Tokyo Commodity Exchange (TOCOM) have fallen to a 3-year low in early August to 209 Yen per kg before rebounding again.

Rubber prices are expected to remain weak for most of 2012-2013 on cyclical weakness, Eurozone debt crisis and slow down in China demand. But market could respond to stimulus measures and sustain above the lows set in 2012, according to Sreekumar Raghavan, Chief Commodity Strategist at Rubber Country (www.rubbercountry.com) a new portal from theCommodity Online Group.

Fundamentals are not supportive of rubber as global production has risen in recent years while demand has fallen in major consuming countries. This is the reason why Thailand, Indonesia and Malaysia who account for 70% of global output have taken drastic measures in 2012 to stem the fall in prices. It included procurement of rubber at prices above market levels and the recent decision to cut exports by 300,000 tonnes and cut aging trees to curtail 4,50,000 tonnes of production.

Global natural rubber production has risen from 6.6 mn tonnesi 1998 to 10.1 mn tonnes in 2008, 11 mn tonnes in 2011. Prodcution may rise further to 12.5 mn tonnes in 2013 and, 14.9 mn tonnes in 2014.

“High prices in recent years had prompted rubber producing countries to ramp up production and this is not unusual for cyclical crops like Rubber. Every 7-10 years rubber prices crash in response to higher production and rebounds again as demand picks up at lower levels,” Sreekumar Raghavan said.

In recent years, the boom-bust cycle has shortened due to certain global developments. In late 2008 rubber prices plummeted following the financial crisis but rebounded again in 2010 as drought conditions in Asia Pacific region resulted in lower production and sharp rise in prices.

The prices of natural rubber hit a record high of ¥528 a kilogram in February 2011 but crashed again in August 2012 to a low of 209 Yen as global manufacturing growth has weakened.

Rubber prices will continue to gain support from Asia-pacific demand mainly from China’s booming automotive, medical, heavy equipment and other industries. Higher crude oil prices are also supportive of natural rubber in the coming months. However, with global economic growth forecast for 2012 forecast at 3.5%, and 3.9% for 2013, rubber will have a challenging time ahead unless stimulus measures are in place to boost demand.

India Rubber Futures
At India’s National Multi Commodity Exchange (NMCE), October 2012 contract may rise to Rs 18100 per kg if prices don’t fall below Rs 15,900 in the near term. However, if prices go below that level, the resulting crash could see prices falling to Rs 12,000 levels, according to Rubber Country analysts. In spot market, rubber traders can start accumulating stock if in future prices are moving above Rs. 17250 per 100 kg, the analysts added.

“Rubber Country (www.rubber country.com), the newest portal from Commodity Online Group caters to the long felt need of the rubber traders and investors for reliable price information, latest news and analysis on the rubber industry worldwide,” George Iype, Managing Director, Commodity Online said.






Indian Rubber Industry urges duty free import
August 23, 2012




The association, its leaders, including AIRIA (SR) Chairman K. Vaidyalingam, had been asked by the government to submit data substantiating its appeal for an anti-dumping duty on imports of finished rubber products.

NEW DELHI (Commodity Online): Leaders of All-India Rubber Industries Association (AIRIA) urged the Central government to permit duty free import . Short fall in rubber production in India would be 75,000 tonnes this year said Vinod T. Simon president of All-India Rubber Industries Association (AIRIA). The fall in the production can be adjusted only through importing natural rubber said rubber association.

T.Simon added that the rubber industry was hit on account of high duty on import of inputs and low duty on finished products. And has urged duty free import.

How ever the rubber board agrees that there is a shortfall in production about 4 %. The industry estimates the growth in consumption would be 7.5-8 per cent.

The association, its leaders, including AIRIA (SR) Chairman K. Vaidyalingam, had been asked by the government to submit data substantiating its appeal for an anti-dumping duty on imports of finished rubber products.

Tyre dealers demand price cuts as rubber prices drop

Tyre dealers demand price cuts as rubber prices drop
August 21, 2012




OEMs facing pressure on margins as costs continue to go up

As the tyre OEMs observe wait-and-watch mode due to continuing pressures, tyre dealers’ federation has demanded cut in prices of tyres on the back of fall in prices of natural rubber. While the federation seeks 18-20 per cent reduction in prices, rupee depreciation and high prices of imported crude derivates are reported to be limiting the scope of looking at price reduction for tyre OEMs.

“Now the natural rubber price is hovering at about Rs 174 per kg as against Rs 240 per kg in November 2010. Similarly, the prices of other petro-based raw materials are prevailing at the average rates of year 2008. Hence, there is a case for all the manufacturers to roll back the tyre prices in a pro-rata manner. During 2010-11, tyre prices across the board increased by 18-20 per cent and now the raw material prices pro-rata have come down steeply. However, domestic tyre majors are in no mood to pass on the benefit of lower cost of raw material to consumers. Reduction of tyre prices will result in lower road transport cost and in turn help tame inflation,” said S P Singh, convenor, All India Tyre Dealers’ Federation (AITDF) said.

“Tyre prices have not witnessed any reduction in the last quarter despite steady decline in crude and rubber prices. However, with rupee depreciating against dollar, prices of imported crude derivatives continue to be high. This coupled with the demand slowdown in the automotive industry has led tyre manufacturers to remain on a wait-and-watch mode,” Subrata Ray, senior vice-president corporate ratings, Icra told Financial Chronicle.

Meanwhile, OEMs have indicated that their costs continue to go up and are facing pressures on margins. “Average cost of raw materials in Q4FY12 was Rs 154 per kg, while in Q1FY13, it went up to Rs 159 per kg, registering a four per cent rise. Natural rubber, which started with Rs 100 per kg in FY10, went up to the level of Rs 245 per kg in FY12 and in Q1 of this financial year it was about Rs 193 per kg. Sequentially, synthetic rubber has gone up seven per cent and carbon black has also gone up 11 per cent in Q1. In July this year, raw material costs went up further,” pointed out tyre firms.

“Moreover, the increase in production of radial tyres in India resulted in manufacturers importing some better varieties of rubber. With the inverted duty structure and the fact that we are net importers, the depreciating rupee has also impacted us negatively,” they added.

However AITDF has stated that a five per cent reduction in natural rubber price would result in a strong double-digit rise in domestic Ebitda and there is a strong case for reduction in prices of tyres.

Icra’s Ray pointed out that during Q1FY13, the operating margins of some tyre companies witnessed improvement (YoY), largely supported by favourable rubber prices. Although natural rubber prices have been on a falling trend over the past eight to nine weeks, crude prices has started trending upwards again in the current quarter. This limits the tyre manufacturers’ ability to reduce tyre prices in proportion to the falling rubber prices. Also, in spite of some improvement in operating margin, the industry-wide profitability (RoCE) remains constrained by large investments underway, further limiting ability to lower prices.

Meanwhile, AITDF has sought government intervention for reduction of prices by 18-20 per cent. “This will save the hapless tyre dealers and road transporters. The domestic tyre industry is taking undue advantage by posting arbitrary and indiscriminate tyre prices due to delay in passing of final orders of cartelisation from Competition Commission of India,” it alleged.





India: Widening production-supply gap sees rubber imports increase
August 21, 2012




Production – Consumption mismatch is continuing in the natural rubber (NR) market and this in turn increases import to the country. According to the latest provisional estimates of the Rubber Board, production dropped 0.5 per cent in April – July period while consumption edged up 1.8 per cent.

During the period 238,700 tones were produced as against 240,000 tones in the same period of last financial year. While the cumulative figure of consumption is 330,250 tones as against 324,425 tones. Production of NR for the month of July, increased 2.6 per cent to 66,000 tones compared to 64,300 tones during July 2011. Consumption in July increased marginally at 0.6 per cent to 83,000 tones compared to 82,500 tones in the same month of last year.

It is significant to note that the supply – demand gap is widening in the domestic trade of rubber as in April- July period there was an overall shortage of 91,550 tones. In July alone the shortage was 17,000 tones. So the market is desperately in need of more rubber and now this being made up with import from South East Asian region.

The Board data said that 76,666 tones were imported during April -July period as against 60,461 tones that clearly indicates the shortage of rubber in the Indian market.

Onkar Kanwar, chairman, Apollo Tyres said: “There is serious shortage for natural rubber due to the slow pace in re-plantation and due to slow pace in the increase in acerage in fresh rubber plantations. Re-plantation is the urgent need of the day, otherwise industry has to depend more on imports.”

Companies like Apollo is now looking at taking over plantations in countries like Indonesia and Thailand on lease basis in order to carry on with their production, he added.

According to experts there was a marked increase in the demand for rubber during last decade thanks to capacity expansion and Greenfield plants of major tyre companies. But NR production is almost static, giving chance only for incremental increase. It is likely that India would have serious problems on the rubber front as the country require 1.5 million tones by 2015-16, while the production is likely to increase to a range of 1.1 million – 1.2 million tones, they added.

According to rubber board sources, India is having a comfortable stock and there will not be a serious shortage in the near future. The board now estimates a stock of 216,000 tones. So they discard the possibility of a crisis on the supply front. But industry sources said that the market is not having such a huge stock and the salable stock would not be over 100,000 tones which is sufficient just for one month. So the market will be on a deep crisis unless, there is serious effort to increase production.

Because of the lower price tags in the global market, the rubber based industries, especially the tyre sector, opts for imports.

The better quality of imported rubber also adds value to the imports, imported rubber is more suitable for the manufacture of radial tyres, said Satish Sharma, Chief, India Operations, Apollo Tyres. During the year 2011-12 India imported 205,050 tones as against 188,387 tones in 2010-11. As per the current pace, import is likely to cross 250,000 tones at the end of March, 2013.






Spot rubber slips on buyer resistance
August 21, 2012




KOTTAYAM, AUG. 21:

Rubber market showed a mixed trendon Tuesday. In spot, prices slipped on buyer resistance and the overall sentiments were still bearish. Leading grades failed to sustain at higher levels as there was no follow up buying from major consuming industries.

Sheet rubber weakened to Rs 170 (171) a kg both at Kottayam and Kochi, according to traders and the Rubber Board. In futures, the September series closed at Rs 168.70 (169.57), October at Rs 167.50 (168.16), November at Rs 167 (166.99) and December at Rs 167.50 (167.62) a kg on the National Multi Commodity Exchange.

RSS 3 (spot) dropped to Rs 154.77 (155.05) a kg at Bangkok. The August futures improved to ¥213.5 (Rs 149.15) from ¥212 a kg during the day session and then to ¥215 (Rs 150.19) in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 170 (171); RSS-5: 160 (163); ungraded: 153 (155); ISNR 20: 150 (150) and latex 60 per cent: 113 (113).







Rubber growers demand help on falling rubber prices
August 21, 2012




SONGKHLA, Aug 20 – Thailand’s rubber growers network from 14 southern provinces converged on Songkhla provincial hall on Monday afternoon to press the government for help to shore up falling natural rubber prices.

Police were deployed to ensure law and order around the provincial hall while the growers gathered to demand government intervention on falling rubber prices.

Growers said they have asked for government help many times since January but until now there has been no progress.

They said the raw rubber sheet price has fallen to Bt70 per kilogramme, and they wanted to see the price stay at Bt120 per kilogramme.

The network used a truck with loud speakers as their makeshift stage to attack government measures to resolve the price problem.

They planned to submit a letter to Prime Minister Yingluck Shinawatra asking her to issue meaningful actions to help the growers and remove those who have caused the problem.

Meanwhile, in Ranong, some 100 rubber growers gathered at the Office of the Rubber Replanting Aid Fund (ORRAF) to demand its urgent coordination with agencies concerned to deal with the falling rubber price problem.

The group threatened to carry their protest to Bangkok to demand the government shore up the rubber price to at least Bt120 per kilogramme.

Rubber Seen Dropping as Chinese Inventories May Equal Record

Rubber Seen Dropping as Chinese Inventories May Equal Record

Aug 20, 2012: Rubber is poised to drop as sustained supplies from Southeast Asia and falling demand from China’s tiremakers push stockpiles to match their record at Qingdao port, the main shipment hub, an industry executive said. Futures fell for the first time in four days.

Inventories in the bonded zone, where traders store deliveries before paying duties, will probably climb to 250,000 metric tons by end-August from 240,000 tons last week, Li Xiangou, chairman at the Qingdao International Rubber Exchange Market, said in an Aug. 17 interview. China accounts for 33 percent of global demand and tires represent 70 percent of natural-rubber consumption in the country. Reserves last reached 250,000 tons in mid-January, he said.
Rubber traded in Tokyo has plunged 59 percent from a record in February 2011, cutting costs for tire makers such as Bridgestone Corp. (5108), Goodyear Tire & Rubber Co. (GT) and Michelin & Cie as the economy slowed in China, the world’s largest auto market, and Europe struggled to contain its debt crisis. Thailand, Indonesia and Malaysia, the top three shippers, agreed to cut exports by 300,000 tons in a bid to boost prices.

So far there’s no bright spot in the local rubber market wherever you look, said Li. Demand is dropping due to a weak auto market while shipments from Southeast Asia are streaming in at the usual pace. Prices may drop further this month and in September, he said.

The northeastern port of Qingdao is in Shandong province, which produces about half of China’s tire output, according to data compiled by Sri Trang Agro-Industry Pcl (STA), Thailand’s largest publicly traded rubber exporter.

‘Too Pessimistic’

Rubber for January delivery fell as much as 1.8 percent to 217 yen a kilogram ($2,730 a ton) before settling at 219.40 yen today. That follows a three-day gain of 6.5 percent. Futures reached a record 535.7 yen on Feb. 18 last year and dropped to the lowest level since October 2009 on Aug. 14.

One can be too pessimistic these days after the recent sell off, Li Shiqiang, general manager at the China unit of Sri Trang Agro, said in Qingdao Aug. 17. Once sentiment recovers, tiremakers will replenish their inventories, boosting demand, and a sharp fall in prices will also trigger government actions in producing countries.

Thailand, Indonesia and Malaysia, which represent about 70 percent of global supplies, plan to cut down aging trees across 100,000 hectares (247,105 acres). The move, combined with the export cut, will remove 450,000 tons from the market, the International Tripartite Rubber Council, which represents state agencies and exporters, said in a statement Aug. 16.

‘Bear Market’

The increase in Qingdao stockpiles is partly because Thai shippers reduced direct sales to some Chinese buyers because of contract difficulties and prefer to store supplies at warehouses there instead, according to Pongsak Kerdvongbundit, honorary president of the Thai Rubber Association. They deliver to customers once they receive payment, he said.

We are in the long painful process of a bear market due to the global economic recession, Tang Lizhi, president for the China region at Okachi (Shanghai) Co., the unit of the largest rubber broker on Tocom. The bear market will last for a while, with a sporadic rebound along the way whenever China cuts interest rates or reduces banks’ reserve requirements.

Potential Stimulus

Governments from the U.S. to China may take new measures to stimulate growth, boosting demand for commodities. Premier Wen Jiabao said easing inflation provides room to adjust monetary policy, state television reported last week. Federal Reserve Chairman Ben S. Bernanke may talk about monetary options at a conference in Jackson Hole, Wyoming, at the end of the month. Chancellor Angela Merkel has signaled Germany’s support for a European Central Bank plan to resolve the region’s debt crisis.

Rubber may find a bottom in the fourth quarter after the U.S. presidential election and China’s party congress, said Li of the Qingdao International Rubber Exchange Market.

China’s economy expanded 7.6 percent in the second quarter from a year ago, the slowest pace in three years. Truck sales fell 10 percent in July from a month earlier, China Automotive Information Network data show. Passenger-vehicle sales trailed analysts’ estimates for the first time in five months.

Many Chinese tire makers are mired in high inventories of end-products right now, Li said. They have moderated their raw material purchases.

Warehouses ‘Full’

Declining truck sales and slowing growth will cut demand for heavy-duty tires, reducing total natural-rubber demand by 5 percent this year, according to Shen Jinrong, chairman at the biggest tiremaker Hangzhou Zhongce Rubber Co. A tire for a medium to heavy commercial vehicle uses as much as 18 kilograms (40 pounds) of natural rubber on average, compared with less than 1 kilogram for a passenger car, according to Jeremie Capron, an analyst at CLSA Asia-Pacific Markets in Singapore.

The warehouses are so full that the dealers are dumping the new shipments at a discount to the tire factories because they can’t find storage for them, Li said. I think the year- on-year reduction will be more than the 5 percent estimated by Zhongce, he said, without giving an exact figure.

Global natural-rubber supply will exceed demand for a third year in 2013, according to RCMA Commodities Asia Group in Singapore. Production will top usage by 299,000 tons, from a surplus of 321,000 tons this year and 4,000 tons in 2011, according to Chief Executive Officer Chris Pardey, a former commodities trader at Cargill Inc. and Noble Group Ltd.

Consumption may rise 2.5 percent to 11.2 million tons in 2012 as output grows 3.2 percent to 11.3 million tons, the International Rubber Study Group said last month. Demand will probably climb 4.3 percent to 11.7 million tons next year as production gains 4.4 percent to 11.8 million tons, it said.

(Source: Bloomberg)




Thailand plans $476 mln more for rubber intervention

BANGKOK, Aug 21 - Thailand, the world's biggest rubber producer and exporter, could spend another 15 billion baht ($476 million) on rubber intervention after failing to lift prices with its buying so far, Deputy Agriculture Minister said on Tuesday.
"We expect to submit a plan to spend another 15 billion baht for cabinet approval next week or immediately, this week," Deputy Agriculture Minister Nattawut Saikuar told Reuters.
The government had also earmarked 15 billion baht for the initial intervention scheme. Nattawut said the government had bought around 80,000 tonnes of rubber sheets from farmers since the programme was fully implemented in May.
($1 = 31.5250 Thai baht)
(Source: Reuters)

Tyre grade rises after export cuts by top rubber producers

Tyre grade rises after export cuts by top rubber producers

* SIR20 up more than 3 pct, SMR20 rallies on export cuts
* Thai grades untraded, prices firm
* Producers to cut exports by 300,000 T this year

SINGAPORE, Aug 17 - Indonesian rubber changed hands at a price as high as 113.50 U.S. cents a pound ($2.50/kg), up 3.6 percent from earlier this week, after Tokyo futures rallied on the latest plan by top producers to cut exports this year, dealers said on Friday.
Malaysian rubber jumped more than 5 percent, trading as high as $2.64 a kg, from $2.50 late on Tuesday. Thai RSS3 and STR20 were untraded but the grades also firmed after Thailand, Indonesia and Malaysia decided to curb supply to shore up slumping global prices.
"The reaction from the market is very strong, but we still need time to see what the action is. That is more important," said a dealer in Singapore.
"They need to have enough budget to do it," said the dealer, adding that the three producers would have to buy rubber from domestic markets before eventually selling the commodity in the future.
Thailand, Indonesia and Malaysia on Thursday announced the new measures, which will cut supply by up to 450,000 tonnes, which is similar to a move in 2008 to slash exports by more than 900,000 tonnes. The three countries account for 70 percent of global output.

The most active rubber contract on the Tokyo Commodity Exchange, January extended gains on Friday and rallied 6 percent to a high of 224.8 yen a kg on the export cut news and after German Chancellor Angela Merkel gave her support to efforts to resolve the euro crisis.
The contract had plunged to its weakest in nearly three years this week on worries about the health of the global economy, dragging down the price of tyre grades.
Indonesian SIR20 was traded late on Thursday at 111.25, 111.50 to 113.50 U.S. cents a pound for October/November delivery, higher than 109.50 cents transacted late on Tuesday.
There were no reports of deals for Thai RSS3, which was offered at $2.75 a kg on Friday. The grade was traded at $2.60 a kg earlier this week -- well below a lifetime high of $6.40 a kg in February 2011.
"TOCOM has rebounded and then everything goes up. It's typical. This is what the governments want. We have seen this action before and we don't know if this rally will last or not," said a dealer in Kuala Lumpur.
Fears of defaults have gripped the rubber market this week as tyre grades tumbled after price-setting Tokyo futures slipped to their weakest since late 2009.
Though some tyre grades are still being sold to top consumer China, the hefty drop in prices in recent months has caused anxiety among sellers, who were forced to renegotiate contracts with Chinese buyers late last year.
(Source: Reuters)

Tokyo futures drop near 3-year low on demand fears (Aug 13)

Tokyo futures drop near 3-year low on demand fears (Aug 13)
August 13, 2012




SINGAPORE, Aug 13 (Reuters) – Tokyo rubber futures fell to their weakest in nearly three years on Monday on worries about slowing demand and the debt crisis in Europe, while losses in China’s equity market helped push Shanghai futures to a contract low.

The most-active Tokyo Commodity Exchange rubber contract for January delivery settled down 5.0 yen a kg at 213.9 yen, its weakest since October 2009, after earlier hitting an intraday high of 219.3 yen.

“Even though oil prices are high, the rubber market is technically week. If it breaks the 200 yen support level, then I think things will look bad,” said a dealer in Kuala Lumpur.

“Nobody is chasing rubber because people think prices could fall again.”

Oil, which often influences TOCOM contracts, firmed on Monday, with Brent rising above $114 per barrel to its highest in more than three months, as Israeli comments on stopping Iran from proceeding with a disputed nuclear programme stoked worries about a disruption in supplies from the region.

Weaker TOCOM and declines in Shanghai shares weighed on the rubber market in China. The most-active rubber contract on the Shanghai Futures Exchange for January delivery slipped more than 3 percent to a contract low of 21,590 yuan a tonne.

Chinese imports of key commodities, such as iron ore and copper, held up better than expected in July, but weak trade figures and a nine-month low in crude oil imports painted a picture of a slowing economy.

Shanghai shares suffered their worst daily loss in nearly a month on Monday, dragged down by steep losses in shares in Chinese brokerages.

In other markets, weak Japanese economic data tempered European investors’ optimism about ECB plans to tackle the euro zone crisis, with stocks down slightly and the euro flat.

The front-month September rubber contract on Singapore’s SICOM exchange was last traded at 250.5 U.S. cents per kg, down 8.70 cents.




India Rubber prices hit 21 month low on weak demand
August 12, 2012




KOTTAYAM, INDIA (Commodity Online): Rubber prices in India recorded a sharp fall in prices in recent months as industrial growth has slowed down due global financial crisis.

In the physical market, RSS 4 grade rubber prices are at 21- month low due to economic slowdown, weak monsoon which keeps rubber market under pressure.

NMCE rubber futures have shown weak performance with the most active September rubber futures hitting weakest level since September 2010 shedding nearly three per cent.

Sheet rubber recorded a decline in its prices from Rs.177 to Rs. 175.50 per kg. The grade rubber prices are also fell to Rs.176 from 177.50 per kg as reported by the rubber board.

In the National Multi Commodity Exchange August series improved to Rs. 173.50 (173.02) and September to Rs. 167.90 (167.64) while the October series dropped to Rs. 167.52 (167.65), November to Rs. 167.25 (168.51) and December to Rs. 171.64 (178.79).





India: As economy slides, truck sales enter slow lane
August 12, 2012



Domestic truck sales seem to be mirroring the current slowdown. Thanks to slow industrial activity and goods movement, medium and heavy truck sales have fallen 18% to 71,456 so far in the current fiscal year. Fearing a further decline in demand, manufacturers have also slashed production by 27% to 74,000 during the April-July period.

Market leader Tata Motors seemed to be the worst hit, with its medium and heavy commercial vehicle sales falling 22% during the period.

“The low GDP rate is one reason,” said Ravi Pisharody, executive director, Tata Motors. “Certain sectors are facing challenges. For instance, the mining sector is in a standstill, affecting truck sales in a big way.”

With goods movement also decreasing, truck rentals have gone down by as much as 11-13% in the current fiscal year.

This has resulted in truck operators turning away from dealers despite discounts of up to Rs. 2.5 lakh and finance schemes offering 5.5-6.5% interest rate, said SP Singh, co-ordinator, Indian Foundation of Transport Research & Training.

“If the freight market does not improve, there is possibility of repossession of delinquent trucks,” he said.

During the downturn in 2008-09, more than 40000 trucks were repossessed for non payment of loan by fleet owners.

Rubber board to crack the whip on smugglers

Rubber board to crack the whip on smugglers
TNN | Aug 10, 2012, 03.27AM IST




KOTTAYAM: Large quantity of natural rubber is being smuggled from Kottayam to other states through Kaliyikkavila route. After receiving several complaints, the rubber board has initiated steps to intensify patrolling from its regional centre in Marthandam, Tamil Nadu.

"This is being done on an experimental basis. Since smuggling cases are increasing, we felt the need to comb this area and have entrusted the job to our flying squad. We will review the new system at a later stage," said board director (licensing and excise) C C Chacko.

Kerala levies a value added tax (VAT) of 5% for 1/kg of rubber while the same charged by other states is less. This raises the price by Rs 2/kg in Kerala. Also cess tax (Rs 2/ kg) needs to be paid to the board. Officials said this additional expense is the driving force behind smuggling operations.

Staff shortage had forced the board to close down its Kavalkinar checkpost in Tamil Nadu on Thursday.

But, deputy director of publicity and public relations M G Satheesh Chandran said the checkpost lost its relevance following the closure of the sales tax check post and so it was shut down. "There are so many ways to enter Tamil Nadu, this is not the only route. There was staff shortage as we had two officials who worked in shifts. So the only way to address the smuggling issue was to form a patrolling unit that will check all documents required for inter-state transportation of rubber and whether cess was paid to the board," he said.

The board has two more checkposts at Walayar and Manjeswaram, where four officials handle the work. Board will send two more officers from Kottayam to strengthen the patrolling force to six officers, he added.

Meanwhile, some rubber dealers voiced their concerns. "Compare the annual production and consumption of rubber in Tamil Nadu. The board should maintain a record of this to find out the quantity of rubber being smuggled from Kerala," said a dealer on condition of anonymity.

Kottayam: Large quantity of natural rubber is being smuggled from here to other states through the Kerala border near Kaliyikkavila. In the wake of receiving several complaints, the Board has initiated steps to intensify patrolling operations based from its Regional Centre in Marthandam in Tamil Nadu. But the shortage of staff has forced the Board to close down its checkpost in Kavalkinar in Tamil Nadu, a place close to Marthandam on Thursday.

"This is only done on an experimental basis. Since smuggling is increasing we felt that combing this area by our flying squad would be much better. We will be reviewing the new system at a later stage to see whether it is effective," said C C Chacko, Director, Licensing and Excise Duty Department of the Board.

Kerala state is levying a Value Added Tax (VAT) of 5pc for per kg of rubber while it is less in other states. This makes an additional Rs 2 per kg in Kerala. Adding to this is the cess tax to be paid to the rubber board. According to officials in the Board it is this additional expense here which is the driving force behind smuggling of rubber.

Meanwhile, M G Satheesh Chandran, deputy director, Publicity and Public Relations, Rubber Board, said that the check post was closed down as it lost its relevance following the closing down of the Sales Tax Check post which used to operate in the same place. "There are many other roads to enter Tamil Nadu. Another issue was shortage of staff here as there were only two here which makes one person at a time," he said. "So the only way was to form a patrolling unit to check the documents required for inter-state transport of rubber and cess to be paid to the Board," he said.

The Board has two more check posts at Walayar and Manjeswaram where there are four staff each. Now the board will be sending two more persons from Kottayam to strenghthen the patrolling force in Marthandam which will increase its strength to six.

Meanwhile, some of the rubber dealers complained that smuggling of rubber to other states is flourishing. "Compare the annual production and consumption of Rubber in Tamil Nadu. Board should maintain a record of this to find out the quantity of rubber being smuggled from Kerala," said one of the dealers.







NMCE Rubber may drop on good rain, ample imports
June 20, 2012




KOCHI (Commodity Online): Natural Rubber in India’s National Multi Commodity Exchange (NMCE) may fall in coming days on the back of improved production in the major growing areas due to recent good amount of rains amid ample imports from Malaysia and other producers.

Presently, In NMCE, the rubber futures is trading higher tracking the global movements.

But the sluggish demand from domestic tyres makers due to ample supply from Malaysia is likely to put pressure over the prices. In addition, the recent rains in the major growing areas in Kerala is expected to improve the production of natural rubber in the country.

All this factors is likely to pull the prices further downwards in the domestic market.

Globally, the rubber prices have moved up on the back of improved crude oil prices and surge in Euro against the USD and Japanese Yen, which encouraged the investors to invest in riskier assets like rubber.

On Tuesday, the rubber prices in both global as well as in domestic exchanges remained subdued as the Brent crude oil prices dropped to a near-17-month low below $95 a barrel, which lowered the price of synthetic rubber.

Crude oil is used to manufacture synthetic rubber. If crude oil price rise synthetic rubber turns costly so natural rubber futures rises in exchanges and vice versa.

In Tokyo Commodity Exchange (TOCOM), rubber for July delivery traded up 1.3 yen to 256.4 yen per Kg and in NMCE, the commodity rose to Rs 18810 per ton on 20th June at 12:15 IST.





India’s rubber imports drop, inventory ample
Written by HMH | August 9, 2012 | 0 |




Aug 9 (Reuters) – India’s natural rubber imports in July fell by more-than 14 percent from a year ago to 17,084 tonnes, the state-run Rubber Board said on Thursday, as tyre makers slowed down purchases due to comfortable inventory built-up from earlier imports.

The country’s rubber production during the month edged up 2.6 percent on year to 66,000 tonnes despite poor rainfall in top producing Kerala state, the Board said in a statement.

“Rainfall is lower than the average, but we are getting it after regular interval. It will not affect on production,” said George Valy, president of the Indian Rubber Dealers Federation.

“Even in August production will be higher than last year.”

Production during the first four months of financial year ending in March was largely steady at 240,000 tonnes, data showed.

India is likely to produce 942,000 tonnes of natural rubber in the current year, up from 899,400 tonnes a year ago as production that was planned years ago comes onstream in non-traditional areas such as north-eastern states.

The world’s fourth-biggest producer’s consumption during July edged up to 83,000 tonnes from 81,210 tonnes a year ago.

India’s imports in first four month jumped nearly 27 percent on year 76,666 tonnes as in first three months tyre makers aggressively imported to cash in on lower overseas prices. (Reporting by Rajendra Jadhav in Mumbai, editing by William Hardy)

Link to rubber board statistics

http://rubberboard.org.in/reports/exportimportvalue.pdf


India’s car makers post mixed sales in July
August 4, 2012




Most of India’s carmakers showed weak sales this month due to economic issues and rising fuel prices, although Maruti Suzuki posted a 9.2 percent increase. The numbers came as a surprise after Maruti suffered a deadly labor dispute last month at the Manesar plant, which is responsible for 40 percent of production.

Its rivals showed mostly weak sales, amid hefty taxes, elevated fuel prices and stubborn inflation that has kept interest rates high, pushing up the cost of vehicle loans.

Maruti Suzuki India, majority-owned by Japan’s Suzuki Motor Corp, said passenger car sales in July rose 9.2 percent to 82,234 vehicles thanks to a low base effect from last year when sales were down due to protracted labor troubles.

Maruti last month was hit again by labor unrest — the worst ever in its three-decade history — that left a manager dead and nearly 100 other executives hurt at its Manesar plant, which is responsible for 40 percent of its output.

The company said last week it had begun assessing the extent of the damage caused by the worker riot at the plant and did not know when it would reopen.

Meanwhile, the local unit of Hyundai Motor, which mostly sells petrol vehicles, reported a 1.5 percent decline in local sales to 49,667 vehicles in July.

Ford India domestic sales slid 16.8 percent to 6,236 vehicles in July, while General Motors in India fell 23.3 percent to 7,285 units.

Ford India said the country’s auto market conditions remained “challenging” as consumer confidence is yet to recover from the effects of a recent hike in petrol prices, ongoing high interest rates and inflation.

Ford India’s president Michael Boneham said he expects the “difficult market situation to ultimately recede in the long run”.

Tata Motors, which owns British luxury brands Jaguar and Land Rover, bucked the trend, as its July car sales surged 53 percent to 26,240 units, with growth seen across all segments.

India, which has been one of the world’s fastest-growing car markets in recent years, has been suffering a slowdown in demand as some buyers defer purchases due to expensive loans and high fuel costs.

The Society of Automobile Manufacturers (SIAM) forecasts car sales will grow by nine to 11 percent in the current financial year, which ends next March, on hopes that possible interest rate cuts will make auto loans cheaper and spur demand.






Rubber planters to begin tapping as rains fail
August 4, 2012




KOTTAYAM: Kurian Thomas, a small time rubber planter, never tapped his trees during Karkidakam, a period marked by heavy rains.

This year, he started tapping because rains have been scanty. “Big planters have a fixed schedule for tapping. But small-time farmers like me can’t follow that schedule. Since the weather is suitable I am doing my job. Who knows when rains will start again making tapping impossible then,” said Thomas.

Usually April-August is when the production of rubber comes down mainly because of the rains, resulting in more rubber being imported during this time. This year, 70,837 metric tonnes of rubber was imported from April-July. Last year, during the same period around 67,000 metric tonnes was imported. On August 1, the price of rubber (rss3) in Kottayam was Rs180 while in the international market it was Rs167 (Bangkok) on the same day.

The good price of the rubber may have also tempted planters like Thomas to start tapping despite this being Karkidakam.

Many planters are following Thomas’ example. Planters, who don’t use rain guards for the trees, start tapping only after monsoon ends in early September. But major planters tap during rainy season as they have rain guards to protect the trees.

“Since there are no rains, this is the ideal climate. Rubber tappers, who are jobless, can earn some bucks,” Thomas said. But he cautioned that rain shortage will hit rubber plantations next season since scanty rains can lead to a drought.

“There was no rainfall in my area for the past 9-10 days. This is bound to reflect next year,” he said. Meanwhile, rubber board climate experts said more rains are likely in October and November. But they won’t compensate the monsoon loss. Experts said Kottayam’s rainfall was 50% less than normal. Rubber board’s deputy director of public relations Satheesh Chandran advised all planters to use rain guards so that they can tap rubber during monsoon.

“The present climate is such that tapping is possible for anyone. But board recommends the use of rain guards so that tapping remains unaffected. Then only we can reap some benefits,” he said.

“Tapping is stopped during the February – March period as the moisture content in the soil is reduced. So an additional halt of 2-4 months due to the rains will affect a planter’s profits,” he said.