Pre-Christmas ‘Santa Claus’ rally boosts Kerala’s natural rubber market to Rs 132 per kg

The pre-Christmas price rally phenomenon in rubber, better known as Santa Claus rally, has given a much-needed touch of festivity to the domestic rubber price, sagging under the strain of slowdown in demand, reports Financial Express. From Rs. 126 per kg in mid-November, the domestic price of the premium grade natural rubber, RSS-4 sheet, used in tyre production, has inched up to Rs. 132 per kg in mid-December.

“At least one-third of the rubber plantations in the country’s major rubber-producing state Kerala, has been remaining unharvested, in the apprehension that tapping is non-viable,” Sibi Monipally, secretary, Indian Rubber Growers’ Association (IRGA) told Financial Express. “Price improvement is heartening. But, even the current price is hardly sufficient to make rubber farming attractive,” he added.

This year the rains in the peak tapping season have also not been kind to the plantations. Contrary to its usual evening rain pattern, North East Monsoon has been causing morning showers, hindering rubber tapping.

The good news for the rubber farmers is that the pre-Christmas slowdown in demand worldwide has triggered a slow improvement in domestic natural rubber (NR) price. In the first week of November 2019, following the outbreak of Pestalotiopsis disease in the rubber plantations in major NR producing countries like Thailand, Indonesia and Malaysia, domestic price of rubber in India had moved up by 7 per cent to Rs. 111 per kg.

According to KN Raghavan, executive director, Rubber Board of India, the reason for the apparent fall in productivity of NR to 1,453 per hectare is that the harvestable plantations were left untapped.

In the December issue of Board’s monthly journal “Rubber”, he points out, that although 6.4 lakh hectare of rubber estates were harvestable, only 4.48 lakh hectare were harvested. “That 5.82 lakh tonnes of NR was imported in the same period, is a matter of grave concern,” said Raghavan.

During the last fiscal, the country’s NR production was 6.51 lakh tonnes and consumption was 12.12 lakh tonnes. According to Rubber Board, NR production is up 11 per cent year-on-year in the April to September period. At the same time, the Board has rolled back the production projection for the year by 3 per cent at 7.3 lakh tonnes.

Shekhar Ghosh is a communications consultant and and former journalist, who has edited and written for publications such as like Business India, Business Standard, Business Today and Outlook.

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