This is the topic of worry for Indian Rubber industries that the natural rubber prices can surpass Rs. 250/Kg after October, 2024. Let us understand this in details that why these prices are increasing so fast?
Worse Climate Conditions
Excessive rainfall in the major rubber producing countries like Vietnam and Thailand have led to disruption in the production, causing shortage in supply and ultimately leading the prices upward. Local natural rubber market in Kerala also affected by the heavy rain and ultimately leading to disruption in natural rubber production. Due to this, India had to rely more on imports of natural rubber.
Increase in Consumption of Natural Rubber
Although, Natural rubber production rate has been increased by 2.1% which is almost negligible. It has reached 8.57 lakh per tonnes from 8.39 lakh per tonne. On the other hand, consumption has rose by 4.9% which is directly from 13.5 lakh per tonne to 14.16 lakh per tonne. As a result, the deficit is increased and ultimately leading to higher prices.
Increasing Demand in the Tire Industries
Due to the increased car manufacturing and tire exchange, we have seen the demand of rubber in the tire industry.
With the increasing economic growth and also the number of cars that are running over road, the demand of rubber is continuously increasing.
Increased Demand for Green Products
To decrease the pollution levels, the awareness regarding the environment is continuously increasing. Natural rubber is a great alternative for synthetic rubber because it is environment friendly.
As a result, the increasing demand for green product is responsible for increased rubber prices.
Global Supply Chain Disruption
Due to Covid-19, the disruption is caused in the world supply. Lockdown in rubber manufacturing countries and also the other ban, the supply had been disrupted.
Due to increased demand and also decreased availability, the rubber prices has been hiked.
Increasing Demand in China
China is the biggest manufacturer of tire and also the biggest customer of natural rubber.
Due to industrial advancement, the demand of rubber is continuously increasing.
Also, the increasing demand of China’s produced products, the rubber prices are also affected in the global market.
Impact of These Rising Prices
Due to the increased demand of natural rubber, there are chances of increase in prices of tires. It also impacts the vehicle manufacturer and also the customers.
Also, the prices of other commodities can also increase.
What are the Solutions?
By increasing the production of rubber and also the local manufacturing, India can reduce its dependence.
Alternative resources can also be created.
Conclusion
Increasing natural rubber prices is a big challenge for Indian economy. Finding a balance between demand and supply and also finding alternatives can be a solution for this issue.
