Rubber production picking up

Rubber production picking up
Posted: 05 Aug 2010 11:28 PM PDT
KOTTAYAM: Natural rubber production in the country was picking up and the production during April—July 2010 was 223250 tonnes compared with 209575 tonnes in the previous year, registering an increase of 6.5 per cent, according to Rubber Board chairman, M r Sajan peter.

The production in 2009—10 was reduced to 831400 tonnes from 864500 tonnes during 2008—09, showing a decline of 3.8 per cent mainly due to adverse weather conditions, growing stock of old plantations and intense harvesting in 2008, Peter said in a release today after his address in the 163rd meeting of Rubber Board here.

It is projected that rubber production in 2010—11 would be 893000 tonnes, he said. The consumption in 2009—10 increased from 871720 tonnes in 2008—09 to 930565 tonnes, an increase of 6.8 per cent while the projected consumption this fiscal is 978000 ton nes.

During April—July 2010 consumption rose to 307550 tonnes from 297850 tonnes of the same period of the previous year, projecting an increase of 3.3 per cent.

Consumption during the first quarter of the current fiscal in the automotive sector grew by 5.4 per cent while the non tyre sector recorded a marginal decline of 0.3 per cent.

Peter said as per the projections there would be a deficit of 85000 tonnes this year. However there would be no shortage in the domestic market as the opening stock in 2010—11 was 253975 tonnes.

(thehindubusinessline.com)





Atma challenges Board data on natural rubber
Posted: 05 Aug 2010 11:27 PM PDT
Automotive Tyre Manufacturers Association (Atma) today contended the production, consumption and stock data for the April-July period released by the Rubber Board.

The crisis over the availability of natural rubber (NR) has deepened with the gap between availability and off-take widening further. This further makes the situation grave in the rubber consuming industry, states Atma.

According to an analysis by Atma based on the Rubber Board data, NR availability (domestic production + import) lagged behind its off take (domestic consumption + export) by a whopping 35,496 tonnes during the period April-July. In the corresponding period last year, the comparative deficit was 7,680 tonnes.

“NR Consumption is rising at a faster pace than production. NR import, therefore, is the only way to meet the shortfall. However, with a hefty 20 per cent import duty that amounts to around Rs 38 per kg at existing prices, imports are not a viable option, said Rajiv Budhraja, director general of Atma. However the board said in the April-July period production had increased by 6.5 per cent at 223,250 tonnes as against 209,825 tonnes in the same period last year. It further said that consumption till June has grown at a slower pace at 307,550 tonnes, registering a growth of only 3.3 per cent. In July consumption dropped to 77,500 tonnes from 78,910 tones in July 2009. Hence the growth rate recorded in the April-July period is lower.

Quoting the Rubber Board data, Atma said as much as 76 per cent of NR stock is with the growers and dealers. This lends credence to the fact that the prevailing high prices are prompting the growers to hold large stock despite lower international prices.

Atma has contested the projected buffer stock of 250,000 tonnes which it believes is at wide variance with the ground realities as the NR dispatches are all of fresh rubber. The Board’s latest data clearly states that the total stock as on July 31, is 220,083 tonnes as against 188,090 tones in the same month last year.

Budhraja said the tyre companies had put in large capacities to meet the rising demand from the Auto OEs and replacement market. The industry is likely to invest around Rs 12,000 crore for capacity expansion especially in the truck-bus radial. However continued shortfall in NR is likely to slacken the process of manufacturing of tyres.

The Chinese government has moved swiftly in aid of its tyre industry and Chinese tyre manufacturers are able to procure NR by paying less than 7 per cent import duty giving them advantage in terms of lower production cost in comparison to Indian manufacturers. Atma has therefore asked for imposing customs duty on NR on a fixed basis when the NR prices go beyond a certain level. Under the existing applicable ad-valorem rate of duty, when NR prices move up, the consumers not only have to pay more to import but also bear the burden of customs duty that goes up proportionately. Atma has alluded to the import duty scenario in China where import duty on sheet rubber is 20 per cent or Yuan 1.6 per kg, whichever is less. At current international prices of NR at around Yuan 23 per kg, the customs duty on import of sheet rubber in China works out to less than 7 per cent.

(business-standard.com)



Rubber Set for Best Weekly Gain Since June on Improved Auto Demand Outlook
Posted: 05 Aug 2010 11:30 PM PDT
Rubber advanced for a second day, heading for the biggest weekly rise since June, amid speculation that demand for the commodity used in tires may grow after automakers raised their earnings outlook.

Futures in Tokyo climbed as much as 0.7 percent to 282.6 yen a kilogram ($3,282 a metric ton) after reaching a five-week high of 287 yen yesterday. The price is set for its best performance since the week ended June 25.

Toyota Motor Corp., the world’s largest carmaker, increased its full-year profit forecast this week on recovering U.S. sales and gains in Asia. The report came after Honda Motor Co., Japan’s second-largest automaker, raised its earnings outlook on improving Asian sales.

“Good numbers from carmakers eased concern that a slowdown in the U.S. economy may curb demand,” Kazuhiko Saito, analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Demand may be sustained, led by growth in Asian car sales.”

January-delivery rubber traded at 281.2 yen at 2:30 p.m. on the Tokyo Commodity Exchange.

Toyota may post net income of 340 billion yen in the year ending in March, compared with an earlier estimate of 310 billion yen, it said on Aug. 4. The automaker raised its sales outlook for all regions except Europe amid a rebound in demand.

Honda expects net income of 455 billion yen in the year ending March, compared with an earlier estimate of 340 billion yen, the Tokyo-based company said July 30.

Gains in rubber futures were limited as Asian equities fluctuated and the dollar traded near the weakest in eight months against the yen ahead of a report today expected to show that the U.S. lost jobs for a second month.

U.S. non-farm payrolls probably fell by 65,000 in July, according to the median estimate of 84 economists surveyed by Bloomberg News. More Americans than projected filed applications for unemployment insurance last week, indicating firings remain elevated as the recovery moderated.

January-delivery rubber on the Shanghai Futures Exchange lost 0.8 percent to 24,625 yuan ($3,637) a ton.

(bloomberg.com)