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 Synthetic Rubber Punctures Dreams of Growers

September 30, 2006 - KOCHI: Rubber farmers are again on a sticky wicket with the synthetic rubber consumption registering a marginal leap, bringing down the prices.

The change in consumption pattern, with users' demand shifting from natural rubber (NR) to synthetic rubber (SR), has caused big worries for the farmers.

Synthetic rubber has been seeing higher demand primarily from industrial consumers since its prices fell following the softening of crude oil.

According to market estimates a 2 per cent rise in demand was registered for synthetic rubber in the current financial year. This means SR accounts for 25 per cent of total rubber intake, with natural rubber constituting 75 per cent. Earlier, the NR and SR ratio was 77:23.
If growers are to be believed, futures prices are currently under a tight control of a section of speculative traders. Growers feel that the sharp fall in prices over the past couple of days is a planned move.

Traders say that confusion reigns supreme in rubber market and nobody can predict a definite direction. The market was expected to see a drop in prices during the off-season, as there was a good stock with growers.

Experts feel the stock could be so huge that the market may witness excessive supply, which will be tragic for farmers during the off-season. The Rubber Board had also warned of a difficult situation a few weeks ago.

At the beginning of the current financial year, Rubber Board had projected a total consumption of 8,41,000 tonne at a growth rate of 5 per cent. The board later re-estimated the consumption at 8,13,000 tonne expecting a 1.5 per cent growth only.