T. Meren Paul, Kohima
[dropcap]I[/dropcap] happened to be at Kerala for a fortnight in the month of February in connection with the 35th National Games Kerala 2015 where I travelled between Trivandrum, Kochi/ Ernakulum, Thrissur and Kannur to meet our team officials and Athletes to see their well beings. As I took night travel by road I came across good number of fully laden truck carrying round logs. On enquire from our Liaison Officer, I was told that these logs were all felled Rubber tree. On further conversation I was shocked to learned that all the large scale commercial rubber farmers in Kerala are felling all the rubber trees and supplying it as timbers for making high class furniture and shifting their plantation to other species of high value trees as rubber production has become costly due to high labor costs that do not commensurate the market price after the natural rubber prices in the international market plummeted to Rs. 95 per kilogram from peak Rs. 260 per kilogram. In Kerala only the small and marginal farmers are still keeping the rubber trees which they manage by themselves without employing any labor. Ironically the price of tyre has not come down in spite of the steep fall in the price of raw material.The price of Natural rubber has nosedived to Rs. 95 from Rs. 260 in various global markets today on account of poor demand. According to expert the steep fall in prices of natural rubber is due to poor off take by China which is the world’s largest consumer and the European nations. There is now hike in demand of synthetic rubber in European market due to its cheaper price. International expert says the price of rubber is likely to be on a lower state till 2018 and a slight improvement might be seen by 2020 only. The grade of natural rubber is classified into Ripped smoked sheets grade RSS-1, RSS-2, RSS-3, RSS-4, RSS-5 where the top grade RSS-1 is used in pharmaceutical industry and the other grade for automobile tyre and other product.
It is heartening to note that Dr. Hiddle P Smit, former Secretary General of International Rubber Study Group and rubber market analyst suggested “tree felling and reduce tapping” in order to slow falling rubber prices as he predicted that the low price regime could continue for the rest of the decade and even beyond. He said intensive rubber planting done now could lead to a glut in natural rubber market after six years bringing the prices down further.
I have also done a small rubber plantation that may start tapping from next year and had made plan to expand the farm but now after deep pondering the future market of natural rubber is seen in great jeopardy as the international trend of cheaper synthetic rubber replacing the natural rubber is fast catching up. The demand of natural rubber will have a small demand for pharmaceutical usage only and ultimately the investment will go waste. I wonder whether the Rubber Board has better idea and future plan for the use of natural rubber to counter the prediction of Dr. Hiddle P Smit but as of now the RSS-4 grade natural rubber price at Kochi and Kottayam is Rs. 132.00 per kg only and the future is not bright. The natural rubber price at Kuala Lumpur and Bangkok is Rs. 95 per kg. Thailand is at present the world’s largest natural rubber producer. In Thailand Govt. has turn broker and buys up the surplus rubber from the farmers and directly sells the stockpile to China to prop up prices. Thailand Prime Minister Prayut Chan-o-cha had set aside 12 billion bhat to purchase domestic rubber at above market price then sell to China. Since the beginning of the programme last November they have already bought 1,30,000 tonnes.
India is expected to become self-sufficient in synthetic rubber by 2017 as its production capacity triples. For the last many years Indian demand was way above production capacity, but now with the new plants coming on stream suddenly India will become self-sufficient in synthetic rubber production says Stephen Evans, Secretary General of the International Rubber Study Group. India, according to HIS Automotive is expected to jump three places and become the world’s No. 3 Car market by 2018, that has fuelled a domestic rush to produce more of the synthetic rubber that is mixed with natural rubber to make tyres. Relliance Industries of billionaire Mukesh Ambani has begun production at a 1,50,000 tonnes per year (Tpy) styrene butadiene rubber plant. Indian Synthetic Rubber Ltd (SRL) a joint venture of Indian Oil Corporation, Taiwan’s TBRC Corporation and Japan’s Mrubeni Corporation has started a 1,20,000 Tpy plant. The combine production of these plants is expected to meet the country’s synthetic rubber requirement of 45,00,000 tonne annually.
A small stake holder I am at a lost whether we are going to land up with the same feat like Ginger, Turmeric, bamboo etc. Can we hope to see a savior like the Thailand Prime Minister to turn broker for the farmer and buys up the produce above the market price to pop up the natural rubber farming in the State? Under the prevailing scenario I would cautions all would be rubber planters to think twice before you take up any plantation as the nodal department has not yet come out with an advisory although the plunge in the International market began from November 2014.
