Highlights
 

• Production up 3.18% YoY and imports up 19.42% in 2024
   

• Production-Consumption gap 526,000 tons
   
• Commerce Minister dodges floor price plea by smallholders

The calendar year (CY) 2024 saw Indian rubber production going up marginally, consumption making a negligible decline, and imports witnessing a double-digit growth owing to higher domestic NR prices prevailing during most of the year. Analysts said the price rise arrested a possible desertion of plantations by a section of smallholders who were upset over the low prices in recent years.

Indian NR production saw a 3.18% increase in 2024 compared to 2023, while NR consumption in the country registered a .42% decline, whereas rubber imports to the country registered an increase of 19.42% in 2024 compared to 2023 CY.

NR consumption down to 1.402 million tons

The overall production in the calendar year 2024 stood at 876,000 tons compared to 849,000 in 2023 while overall consumption was 1.402 million tons in 2024 which was marginally down from 1.408 million tons in 2023 while imports went up to 575,331 tons in 2024 compared to 481,736 tons in 2023 CY.

The growth in production was more palpable towards the end of 2024. NR production demonstrated an increase in several months of the second half of 2024, aided by favorable climatic conditions and expanded tapping areas due to timely interventions by the Rubber Board. The prices also rose, encouraging farmers to tap vigorously. The Rubber Board noted that the post-southwest monsoon season from October onwards played a crucial role in boosting latex yield, ensuring a better raw material supply to the operators downstream.

In July 2024, India produced 65,000 tons of NR, slightly lower than the 66,000 tons recorded in the same month the previous year. However, production rebounded in the following months. August saw an output of 77,000 tons, exceeding the 76,000 tons produced a year earlier.

The upward trajectory continued in September, with 78,000 tons produced, compared to 75,000 tons in the corresponding period of 2023. By October, production had risen significantly to 87,000 tonnes, marking an increase from 79,000 tonnes in the same month the previous year. In November production shot up to 96,000 tons compared to 91,000 tons during November 2023. In December, the production was 109,000 tons compared to 108,000 tons in December 2023.

Source: Helixtap Analytics and Indian Rubber Board

This surge in production mainly reflected the smallholders’ response to rising prices despite some underlying consumption concerns as tiremakers made guarded purchases from the domestic market while relying more on imports. The effective interventions by the Rubber Board in supporting the farmers and encouraging best practices contributed to the positive momentum.

Consumption struggles and import dynamics

While production showed positive trends, NR consumption faced certain challenges, particularly due to rising raw material costs in both domestic and international markets. The non-tire sector bore the brunt of these increases, leading to a decline in demand. According to the Rubber Board, businesses reduced their NR consumption to mitigate the impact of higher costs, with the most significant cuts occurring in the third quarter of the calendar year.

India’s reliance on NR imports increased, driven by domestic production limitations, price rises, and the need to bridge supply gaps. The country imported 52,718 tonnes of NR in July, which rose to 69,882 tonnes in August and further increased to 74,341 tonnes in September.

By October, NR imports stood at 63,795 tons, bringing the total import volume for April to October to 381,837 tonnes, compared to 293,869 tonnes in the same period in 2023. The significant increase highlighted the growing dependence on foreign NR supplies, especially by the tire manufacturers, amid a significant rise in domestic prices.

November saw a continuation of these trends. The country consumed 114,000 tonnes of NR while imports for the month stood at 45,428 tonnes, up from 36,334 tons in November 2023, reflecting the sustained dependence on foreign cargo to resist domestic price increases.

December imports, however, came down significantly, with the Indian tire-makers realizing the need to cope with domestic rubber prices while global prices too remained elevated. The December 2024 imports stood at 29,190 tons compared to 43,578 tons in December 2024. This took place even as the consumption surged to 120,000 tons in December 2024 compared to 116,000 tons in the same month a year ago.

On the export front, India shipped out 1,988 tonnes of NR between April and October 2024, slightly higher than the 1,872 tonnes exported in the previous year.

Commerce Minister meets rubber stakeholders

Meanwhile, Indian Minister for Commerce Piyush Goyal recently met with stakeholders from the natural rubber sector in Kochi (Kerala) to identify and address issues facing them. The Indian Rubber Board convened the meeting on the instructions of the Minister.

Discussions centered on strengthening domestic rubber production, advancing mechanization, and leveraging AI to tap new markets, among other key topics.

The Minister also explored financing options for producers and enhancing certification facilities. He reaffirmed the government’s commitment to supporting India’s rubber industry for sustainable growth and global competitiveness.

Representatives of the Automotive Tyre Manufacturers Association (ATMA), All India Rubber Industries Association (AIRIA), Indian Rubber Dealers Federation, United Planters Association of South India and National Consortium of Regional Federations of Rubber Producer Societies India participated in the meeting apart from Rubber Board and Commerce Ministry officials including Rubber Board Executive Director M Vasanthagesan.

Sources said the Minister explored possibilities for improving production in traditional rubber-growing areas in Kerala. However, he refused to make any commitment from the Indian Government to ensure a floor price for rubber. The smallholder representatives also raised concerns about the import of compound rubber, which they said was significantly undermining domestic demand and prices.

The Minister agreed to review the Standard Input and Output Norms (SION), which currently allow duty-free imports of natural rubber under the advance license scheme.

Additionally, the Minister assured that issues faced by the smallholders, including the supply of smokehouses for drying rubber sheets and the speedy mechanization of tapping, would be looked into.