Export of rubber from India has picked up momentum.
The Rubber Board says, owing to price advantage, export of rubber from the India has picked up momentum.
The price of natural rubber (NR) in India had been ruling high over international market prices since December 2013. The Indian sheet rubber prices were significantly higher during the last three years and a marked difference of Rs.35 per kg was noticed between Indian RSS4 grade and the comparable grade in Bangkok market during July 2016.
This glaring price gap between the Indian and international prices came down in the third quarter of 2016. From the second week of November 2016, the international prices of NR shot up and is currently hovering at higher levels compared to Indian prices. The spurt in international rubber price was due to the increased demand for rubber from China, upward trend in crude oil price, appreciation of US dollar etc. Natural rubber is predominantly an export commodity in the major NR producing countries like Thailand, Malaysia, Indonesia, Vietnam etc. and rubber prices are highly sensitive to speculative news from major consuming countries like China, India, Japan etc.
In India, natural rubber is traditionally not an export commodity and the major share of the rubber produced in the country is consumed domestically. So the response to speculative price movements owing to reasons not specific to domestic market will be relatively less in India as compared to other major NR producing countries.
The sudden upward trend witnessed in international rubber price is due to the prevailing speculative trend, owing to the aforesaid reasons coupled with the surge in Shanghai and TOCOM exchanges in China and Japan.
Rubber Board is keen in capitalising on the price advantage by promoting export of NR. This would raise domestic NR price to the world market levels. Owing to unattractive relative prices, India’s exports have been negligible since 2013-14. In 2016-17, during April to October period, India’s NR exports were hardly 650 metric tonnes. Exports gained momentum in November - December 2016 and it is expected that India’s NR export may touch around 5000 tonnes during this year.
Rubber Board has been promoting the brand "Indian Natural Rubber" for exports, by which the quality of rubber exported from the country is certified by the Board. Eighty percent of the NR export done so far this fiscal was under the brand "Indian Natural Rubber".
The branding of NR is instrumental in regaining the market share of Indian exporters as the exports from India have been negligible during the last three years. Export of NR is an alternative marketing channel and such efforts will help to maintain consistency in the domestic market price.