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Rubber price with elasticity

Rubber board publishing monthly rubber statistical news with a mathematical error in balance stock. The balance stock had a great role in price. If the missing is positive it means a heavy stock available in India and the rubber board published balance stock as reduced one. 

Available data on the site of rubber board on 1st March 2014

Available data on the site of rubber board on 1st March 2014

As per published monthly rubber statistical news the following analysis lime lights the mathematical error.

The reduced figure of balance stock published by the Rubber Board was to help importers on shortage in India. Actually stock was excess as per the same data without the missing figure. 
Unfortunately Business Standard published like the following.

Rubber imports to go up 47 pc to 3.2 lakh tonnes in FY'14

Natural rubber imports are likely to rise by 47 per cent to touch a new all-time high of 3.2 lakh tonnes in the current financial year on back of lower prices in the global market.

"Till last week, the inward shipments of natural rubber were at 2.9 lakh tonnes and as per our estimates the total imports by the end of 2013-14 fiscal will be around 3.2 lakh tonnes," a senior rubber board official said.

According to Rubber Board data, India's natural rubber imports in the financial year 2012-13 were at 2.17 lakh tonnes -- all time high so far.

Imports have increased notwithstanding the Centre raising import duty on natural rubber to Rs 30 per kg or 20 per cent, whichever is lower, in December. The basic customs duty on natural rubber earlier stood at Rs 20 a kg or 20 per cent whichever was lower.

"Imports have gone up as bulk of contracts for import of natural rubber were made in the period June to October before the import duty was raised. At that time, prices in the international market were down by Rs 35 per tonne as compared to domestic prices," official added.

During April-January period of this fiscal, consumption of natural rubber has marginally come down to 8.11 lakh tonnes from 8.18 lakh tonnes in the year ago period.

Production of natural rubber during April-January period in the current financial year has also dropped by 9 per cent to 7.23 lakh tonnes against 7.98 lakh tonnes in the same period previous fiscal.

The impact of decline in rubber production was visible in export trend, as outward shipments have fallen 66 per cent to 5,357 tonnes against 15,632 tonnes during the period under review. 
Why Rubber Board's senior official said this unpublished details to media? When the low priced import done by the importers why didn't Govt of India imposed anti dumping duty on low priced import? This announcement for the justification of price fall.

This incomplete data to make fool

This incomplete data to make fool

'High natural rubber imports justified by sharp fall in production' Read more at:

India's imports of natural rubber are expected to fall by third in 2014/15 to about 200,000 tonnes, as tapping of newly planted trees likely boosts domestic production to a record high, a senior government official told Reuters. 

A drop in imports by India, the world's fourth biggest producer, would put pressure on global prices that are sitting not far off multi-year lows. 

Large quantity of duty paid import on higher price in India than international.

Large quantity of duty paid import on higher price in India than international.

The price difference more than 60 rupees per kg including 5% VAT.

Who can decide the market price in India higher?

Who can decide the market price in India higher?

All these irregularities through the control of by the Group media of the biggest manufacturer in India.

"Trees planted in non-traditional growing areas are becoming ready for tapping. If weather remains normal, .. 

Read more at:

It is a clear evidence of price fall for a long duration. 

However, there are signs of market improving in the near term. The Government may sort out soon the issues involved in the procurement. The handling charge for procurement agencies has been raised from Rs.4 to Rs.6 a kg. The Union Finance Minister has reduced the excise duty on manufactured articles from 12% to 10%. The car makers have made a corresponding reduction in vehicle prices and vehicle demand that had slumped in 2013 is expected to revive soon. This is positive for the tyre sector and the auto rubber components sector and demand for rubber may revive. 

Govt announced a 2 rupees excess price for RSS 4 sheets to collect by Rubbermark etc with a handling charge of rupees 6 per kg. This is a move to support industries in the name of farmers. If Govt really want to support farmers give farmers Rs 8 /kg to hold rubber with farmers. So that farmers who are holding stock getting Rs 8 per kg will sell at the price of 171/kg. The agencies like Rubbermark can save a large amount of money for the purchase and to store in their storage. This storage will be the reason for the deep fall of rubber price in coming future. 

See the analysis of Indian Rubber Statistics at

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Please note that this is the opinion of the author and is Not Certified by ICAR or any of its authorised agents.