Indian Tyremakers Face Shortage as NR Supplies Decline

According to a report in India’s The Economic Times newspaper, the rising price of natural rubber has created a reluctance amongst rubber growers to re-plant; trees cannot be tapped for rubber during their first seven years of life, so farmers are avoiding replantation where possible and are continuing to tap older trees. Although this provides greater funds at present, a question mark hangs over future supply as both the quantity and quality of latex produced by older trees is inferior to that of younger trees.

According to an analysis conducted by India’s Automotive Tyre Manufacturers Association (ATMA), the country’s share in total natural rubber replantation in South Asia has dropped from 7,000 hectares or 10% in 2004 to 6,900 hectares or 3.6% in 2007. ATMA attributes this decline to the 49% increase in natural rubber since September 2007. At present natural rubber in India costs Rs 130 (£1.52) per kilogram.

According to ATMA director general Rajiv Budhraja, if the replantation rate continues its downward trend India’s tyre industry – which accounts for 5% of the country’s domestic natural rubber production – may face supply problems from 2011 to 2012. “There will be a drop in yield which has already peaked (at 1,767 kg per hectare per annum) and the production will also decline in medium to long term,” he said.

Consumption of natural rubber in India is growing; in 2007 it increased by 4.4% over 2006 to at 850,000 tonnes. The tyre industry has projected a growth of 5% for 2008-09 at 521,000 tonnes, however natural rubber production in 2007-08 registered a drop of 3.2%, to 825,345 tonnes. And while projected production for 2008-09 is for a 6% increase, consumption is also projected to increase, to 899,000 tonnes.

To counter this imbalance, India’s government has offered growers a subsidy of Rs 20,000 (£233.50) per hectare to replant, however this figure is considered too low by the majority of rubber growers. This is an issue that tyremakers are well aware of: “It is important that replantation subsidies are hiked to levels sufficient enough to embolden the growers to successfully pass through the unproductive phase of natural rubber plantation,” reflected ATMA chairman RP Singhania. (Tyres & Accessories/Staffordshire, U.K.)

GRI recently conducted programs in Sri Lanka to empower women and motivate children under its Green x Circle initiative. The company said these endeavors aimed to address the needs of the community, focusing on both women empowerment and youth motivation.

GRI recently organized a training program titled "Management of household finance under current economic conditions" at the Ingiriya Rubber Collecting Center in Sri Lanka, South Asia led by Shashika Nimali, an NLP practitioner and life coach. The company said this initiative provided women in the industry with essential skills and knowledge to effectively manage household finances. GRI's tailored training sessions equipped participants with tools for informed decision-making, ultimately fostering greater financial security and independence, the company said.