Highlights
 

• Smallholders keep inventories as tire makers make guarded purchases
   
• Wintering over, next season may start by March end
   
• Indian Government ups Budget allocation for Rubber Board

The Indian rubber market is witnessing an interesting tug-of-war between the Kerala smallholders and tire makers, with the majority of the former holding back their sheet rubber inventory while the latter makes guarded purchases. The result is that sheet rubber prices have been hovering closely around INR 190/kg (range of -2 and +3) since the dawn of this year, refusing to either climb sharply down or shoot up. It may be noted that the higher global prices, too, have a bearing on this pitch.

Following the call by the National Consortium of Rubber Producers' Societies (NCRPS), the leading forum of smallholders in Kerala, the farmers scaled down summer tapping from New Year's Day itself and made a controlled release of sheet rubber to the market. This was met with resistance by the tire makers, who have resorted to limited purchases, which resulted in prices getting locked around INR 190/kg.

Climate coming as an aid for farmers

The tire makers are keen that the prices do not cross the INR 200/kg, the bar fixed by the farmers’ confederation to let members sell sheet rubber. This stand has brought the confederation under pressure. The only Silverline for them in the battle is the climate; because February is a summer month, they can keep their inventories. Otherwise, the sheet rubber will be easily spoiled in wet climates, forcing the farmers to release stocks, leading to a plunge in prices.

Source: Indian Rubber Board and Helixtap

It has to be seen which group ultimately caved in in this struggle, which is determined by climate and the financial prowess of the smallholders to keep their hearths burning with the income from limited sales. The global supply and global prices are also determinant factors, keenly watched by these players.

Farmers feel that the tiremakers are resorting to imports of both block rubber and compound rubber to browbeat the farmers as the former gun for a fall in domestic prices later with farmers capitulate to a change in circumstances. The smallholders allege that the tire makers are gunning to make bulk purchases when the prices fall.

Kerala has crossed the phase of wintering and the leaves have started sprouting in the rubber trees, according to smallholders. So after mid-March, the rubber trees will be ready for tapping, heralding the next season. Farmers are keeping their fingers crossed as the new production season is just over a month away. In the Northeastern states also, production has stopped now, and not many trades are happening even though prices are INR 10/kg lower than Kottayam (Kerala) prices.

INR 360.31 crore in Indian Budget for the rubber sector

Meanwhile, the Indian Government has made an allocation of INR 360.31 crore (approximately US$41.65 million) for the Indian Rubber Board for the upcoming fiscal year (2025 April-2026 March), up INR 12 crore from the allocation for this financial year (2024 April-2025 March). The announcement, made in the Union Budget presented early this month (February 2025), ensures financial support for key initiatives of the Board such as rain-guarding and planting in new and old areas.

"The increased allocation provides flexibility to finance all producer support programmes outlined in our annual plan," said Rubber Board Executive Director M Vasanthagesan, adding that a revised budget allocation may be requested depending on the progress of various schemes.

However, rubber producers are not fully amused. They criticized the government for not implementing a floor price for natural rubber.

“There’s nothing new in this Budget—just allocations for existing schemes. Our demand for a floor price for small-scale rubber farmers has been ignored,” said Babu Joseph, general secretary of the National Consortium of Rubber Producers Societies of India.

Rising imports add to domestic concerns

The farmers are also concerned about rising rubber imports, mainly from ASEAN countries. The national consortium recently petitioned an Indian Parliamentary Standing Committee to hike import duties on compound rubber from ASEAN countries, to the levels of duties imposed on natural rubber, which is 25%. Since India has an FTA with ASEAN countries, compound rubber currently attracts only 5% import duty. They allege that many exporters from major rubber-producing nations of ASEAN often mix natural rubber with additives like carbon black and export them as compound rubber, bypassing higher import duties.

“The import of compound rubber is expected to hit nearly 200,000 tons this year, which can bring down Indian prices, further deteriorating the condition of Indian farmers,” Babu Joseph said.

Phase V of insurance scheme for tappers launched

Meanwhile, the Rubber Board has announced implementing Phase V of an insurance scheme for rubber plantation workers in the unorganized sector. The rubber tappers, tappers in the tappers’ groups, workers in the group processing centers of the Rubber Producers’ Societies, and the self-tapping farmers owning rubber areas up to one hectare and practicing self-tapping in a minimum of a hundred rain-guarded trees are eligible to join the scheme.  The applicants in the age group of 18-59 must have a work experience of a minimum of one year to join the scheme.

The beneficiaries of the scheme are eligible for insurance coverage of INR 100,000 for normal death, INR 500,000 for death by accident/wild animal attack, and INR 200,000 to INR 400,000 for complete disability due to accident.  On maturity of the scheme, the beneficiary will get an amount proportional to the total premium paid during the period from the insurance company.

The minimum premium amount is INR 300. The Rubber Board will remit INR 900 per beneficiary as the Board’s share. Those who have already enrolled in the scheme in Phases II, III and IV will have the opportunity to pay the premium amount and renew their policy.