Draft National Rubber Policy favours NR as agricultural product
Feb 21, 2019
![Draft National Rubber Policy favours NR as agricultural product](https://rubberasia.com/wp-content/uploads/2018/11/Rubber-Plantation.jpg)
The Ministry of Commerce & Industry, Government of India, has come out with a draft “National Rubber Policy” with focus on welfare of the entire stakeholder community and national economic progress.
The draft Policy is put up in the public domain in order to seek wider consultations and feedback/suggestions from the stakeholders.
The suggestions may be forwarded to the Ministry in the e-mail id ms.banerjee67@nic.in.
The draft policy states that notwithstanding the status of NR being a crucial industrial raw material, the possibility of treating NR as an agricultural product for all practical and legal purposes and
income from rubber production as agricultural income would be explored in consultation with the Ministry of Agriculture & Farmers Welfare.
“NR, being an industrial raw material or not included under the Agreement on Agriculture (AoA) of the WTO, has nothing inconsistent with its status as an agricultural product for domestic policies,” the draft policy says.
Boost for manufacturing
The policy aims at the orderly and complementary growth of all links in the Rubber Industry Value Chain viz., NR production and processing, manufacturing of tyres and general rubber products, trading, ancillary activities etc. Focused efforts would be taken at
synchronizing all initiatives and attempts towards growth of rubber industry as a whole.
There is no designated national level agency to assist rubber products manufacturing sector. A Rubber Industry Development Plan would be formulated by Department of Industrial Policy & Promotion (DIPP) in consultation with other relevant Ministries/Departments and Rubber Board.
An independent Rubber Products Export Promotion Council also could be constituted in order to address the export related issues of the rubber products sector (both tyres and general rubber goods) and also to specifically handhold the manufacturers belonging to MSME sector. Further, export oriented clusters would be identified and specific strategies would be framed for giving the focused boost in exports.
Road rubberisation would be promoted to boost rubber consumption.
Specific action plan for promotion of commercial utilisation of Rubber wood as an alternative source of timber would be prepared with due importance for small dimension technology.
The draft policy also says development of Rubber Parks as processing hubs would be promoted in the private sector or under PPP mode.
“NR consumption in the country in 2030 is projected at around 12 million tonne. It is envisaged that the domestic production is able to meet at least 75% of the NR requirement in 2O3O. In order to attain the projected production, average annual new planting and replanting would be to the tune of at least 8,000 ha and 10,000 ha respectively. Efforts would be made to get all the available mature area under rubber tapped,” the policy says.
The policy envisages furthering SR production, especially types and grades deficit in the country and providing adequate attention on protection against possible environmental hazards involved in their manufacturing.
Price support measures
The price volatility in rubber crop directly impacts livelihood of millions of small and marginal growers involved in the sector. Efforts would be made to ensure the livelihood protection of rubber growers by way of insurance/price support in consonance with the prevailing norms and policies.
In order to ensure quality and standardisation of sheets, Group Processing Centres (GPC) would be promoted with facilities for processing latex, effluent treatment, biogas etc. Latex/sheet/scrap collection through RPS/SHGs would be supported technically and financially.
The share of cooperatives replica orologi rolex and RPS sector together in rubber trading is around 12% at present. Efforts would be made to increase the share of grower forums in rubber trading.
To meet the shortage of rubber tappers, setting up of Tappers Banks as Self Helf Groups (SHGs) attached to Rubber Producers Societies (RPSs) would be formalised and continued.
Research on climate change
Climate Change with its three major dimensions of global warming, increasing seasonal weather variability and higher incidence of extreme/unusual weather events will have impact on rubber plantations in the future. The Rubber Research Institute of India (RRII) has reported that if the present warming trend continues, NR productivity in Kerala could be reduced by 4% in the next decade.
Focused research on climate change and developing climate resilient technologies for adaptation and mitigation protocols would be taken up to address the challenge.
The policy proposes to coordinate the activities of various institutions undertaking R&D activities in rubber sector such as RRII, IRMRA, IITs, Universities and in-house research facilities of major companies, leading to exchange of technology, minimising duplication in efforts and increased output.
Moots treating natural rubber as an agricultural product
The Centre has floated a draft national rubber policy proposing livelihood protection for marginal growers through insurance and price support, introduction of auctions for rubber trading and provision of special allocation for new plantations and replanting of rubber.
The policy also suggests setting up an independent rubber products export promotion council for tyres and general rubber goods, exploring the possibility of treating rubber as an agricultural product and focussing on research and skilling in the sector.
“The price volatility in rubber crop directly impacts the livelihood of small and marginal growers involved in the sector. Efforts will be made to ensure the livelihood protection of rubber growers by way of insurance and price support in consonance with the prevailing norms and policies,” the draft circulated by the Commerce & Industry Ministry proposed.
The draft recognised the need to balance the interests of rubber growers who suffer due to falling prices in the domestic market because of indiscriminate imports and that of the user industry which wants adequate supply of rubber at reasonable prices but could not arrive at a definite solution.
No unwarranted imports
“Recognising the sensitiveness of natural rubber import in terms of its impact on domestic prices and raw material supply for end user industries import policy on natural rubber should accord protection to rubber growers against unwarranted imports adversely influencing domestic prices and at the same time ensure availability of the raw material for consumers at affordable prices,” the draft policy suggested.
The possibility of treating natural rubber as an agricultural product for all practical and legal purposes could be explored, the draft noted. “The policy will also explore the possibility of treating income from rubber production as agricultural income, in consultation with the Ministry of Agriculture and Farmers’ Welfare,” it said.
To help the small-scale producers of rubber items, the rubber products export promotion council proposed in the draft would also handhold manufacturers belonging to the MSME sector. Export-oriented clusters would be identified and specific strategies would be framed for a focussed export boost, it said.
Budgetary support from the Central government in the rubber sector would focus of special allocations for new plantations and replanting of rubber, the draft said.
Appropriate convergence and dovetailing of funds with other programmes of departments/ministries of the Central and State Governments such as Mahatma Gandhi National Rural Employment (MGNREGA), Tribal Affairs and Departmentt of North Eastern Region, would be attempted, it said. The draft observed that futures trading was a competitive tool of marketing and regulated futures trading could contribute to price discovery and facilitate hedging to reduce risk. “Introducing auction for rubber trading in the country would be attempted for fair price discovery,” it said.
Published on February 25, 2019
Rubber imports head for new high
KOCHI: Natural rubber imports to India are heading for a new high with continued fall in production and rise in consumption.
The imports are up by close to 35 per cent for the nine months to December 2018 from a year ago at 4,49,088 tonnes, as per Rubber Board data. In 2017-18, rubber import stood at 4,69,760 tonnes.
The production for the period showed over an 8.5 per cent decline at 4,79,000 tonnes. Even for the usual peak production month of December, it was down by 8,000 tonnes from a year ago at 78,000 tonnes.
However, rubber consumption has been going up consistently. For the nine-month period, it rose 13 per cent to 9,21,600 tonnes, well on its way to 1.2 million tonnes targeted by the board.
The production in the remaining three months is expected to be lower as the lean tappingseason has begun. Usually, tapping comes to an end by January. But this time, some places, which began tapping late, are still continuing though the yield is less.
“Tapping is happening in around 50 per cent of the rubber areas even now. But demand from the tyre and nontyre sector is sluggish as imports have gone up,” said N Radhakrishnan, a rubber merchant in Kochi.
He said prices may not improve in the next year as the economy in China, the largest consumer of rubber, is not in good shape. “The price support scheme of the state government, which assures Rs 150 per kg, is an incentive for the grower to continue tapping,” he said.
Though the Rubber Board has targeted a production of 6,00,000 tonnes for the year, the trade expects it to be much less. Both import and production are expected to be around 5.5 lakh tonnes.
Meanwhile, the Centre has set apart lesser funds than what was allotted last year in the Union budget.replicas hublot Against the Rs 172 crore last year, they have been allotted Rs 146 crore for 2019-20. The board expects to get additional funds for giving subsidies.
“The applicants for subsidies have come down with a decline in replanting. Around 20 per cent of the rubber production area in Kerala also remains untapped,” said Sabu P Idicula, rubber production commissioner.
KOCHI: Rubber growers in Kerala have decided to form a company to venture into manufacturing value-added products as demand has fallen for locally-produced rubber. The proposed Integrated Rubber Farmers Producer Company, which is likely to open a factory at the rubber park near Kochi by June next year, will start by manufacturing tyres for twowheelers and three-wheelers, according to people privy to the plans.
They said efforts will be made to mobilise Rs 100 crore needed for the corporate venture from rubber farmers, with a minimum contribution of Rs 10,000. Farmers will be the shareholders and a contribution of Rs 1 lakh will ensure a voting right. “It is better to collect the amount through clusters of ten or more farmers. That way one of the members of the group can be assigned a voting right,’’ said Jacob Mathew, chairman of the working group.
Rubber growers themselves can provide a good market, said Mathew. “We plan to appoint professionals for marketing of products made under the venture. We plan to enter non-tyresectors as well,’’ he said.
Kerala requires around 10 million tyres annually and the company proposes to make 5,500 tyres a day, he said.
Initially, around 50,000 farmers are proposed to be brought under the scheme, mostly from Kottayam and Ernakulam districts in Kerala, which accounts for nearly 80 per cent of the total rubber produced in the country.
The growers also hope to get support from about 1,200 rubber producers societies (RPS) spread across the state. “Each RPS may have 100-150 active members. It is easier to collect funds or distribute dividend through RPS. We have already called a meeting of the RPS in this region next week,’’ said Joy Antony, president of Pothanikad North RPS.
The objective behind the proposal is to boost consumption of the rubber produced locally, especially since prices have been keeping low in the past few years and a rally is unlikely in the current year.
Recovery in rubber prices unlikely in 2019 due to unfavourable demand-supply fundamentals
Emerging economic trends, a strong dollar and crude oil outlook are also weighing negatively on the commodity
The world consumption of natural rubber (NR) is likely to slow down in 2019 on account of anticipated lower global economic growth, trade war concerns and geopolitical issues.
Global consumption is projected to increase at a slower rate of 4.2 per cent to 14.590 million tonnes (mt) in 2019 compared to the 5.2 per cent rate of growth preliminarily estimated for 2018, Jom Jacob, Senior Economist, Association of Natural Rubber Producing Countries (ANRPC) Kuala Lumpur, Malaysia, told BusinessLine during his recent visit to Kottayam.
Slower consumption
Consumption in China, which accounts for 40 per cent of world consumption, is anticipated to take a slow track by increasing only by 3.2 per cent to 5.85 mt in 2019, compared to the 5.3 per cent rate of growth preliminarily estimated for 2018 and the 7.5 per cent growth attained in 2017.
In India, Consumptionis likely to slow down to 4 per cent in 2019. As per preliminary estimates,rolex falsi India consumed 1.218 mt of NR during 2018, up 12.6 per cent from the previous year, largely driven by high demand from the heavy commercial vehicle tyre sector. The country accounted for about 9 per cent of global consumption in 2018.
Global output may rise
The world production of NR is likely to grow faster at 6.6 per cent to 14.844 mt in 2019 compared to the 4.3 per cent increase preliminarily estimated for 2018. While the overall average annual yield per hectare is expected to remain stagnant due to unfavourable rubber prices and climatic stress, there would be a considerable expansion of the mature area, in varying degrees across countries.
Enthused by the unprecedented peak in rubber prices during the 2010-12 period, farmers had planted rubber trees extensively seven years ago. A part of that is expected to be opened for tapping in 2019. The expansion of area would be more pronounced in Thailand where around 200,000 hectares are expected to be added in 2019.
While a substantial expansion of mature area is expected in Cote d’Ivoire, Myanmar, Cambodia, Laos and Brazil, only a moderate scale of expansion is expected in Indonesia, Vietnam, China, Malaysia and India. The mature area in India is anticipated to expand by 26,000 hectares in 2019.
Production in Thailand is likely to increase by 6.6 per cent to 5.135 mt this year as against the 8.8-per cent increase posted in 2018, as per preliminary estimates.
About 35 per cent of the world production currently comes from Thailand. India’s production fell by 9.5 per cent to 645,000 tonnes in 2018 due to the deluge in Kerala, a key grower, in August 2018, which was followed by widespread leaf diseases and deterioration of soil quality.
Moreover, mature trees, occupying around 190,000 hectares, were not tapped last year due to the unfavourable prices. Assuming normal weather conditions, India’s production is expected to partly recover by posting a 10 per cent rise this year.
Although the anticipated world production (14.844 mt) and world consumption (14.590 mt) closely match each other, market fundamentals are likely to stay unfavourable throughout the new year. This is on account of the fact that the world production has the potential to make a substantial increase in the event of prices becoming attractive.
For instance, in the event of prices bouncing back, production from Thailand in 2019 can be 14 per cent more than what is anticipated. Similarly, Malaysia can produce 53 per cent more and India can produce 65 per cent more if prices make a marked recovery.
Any substantial recovery in prices can unlock substantial supply into the market and thereby offset possible bullishness. The market sentiment in 2019 is likely to continue under the grip of the “production potential” factor.
Rubber & oil prices
The NR market is influenced by a set of factors which are external to the rubber sector. Like other Asian commodities, the NR market has a negative relationship with the US dollar. A stronger US dollar usually exerts downward pressure on the NR market.
As the US Federal Reserve plans two more upward revisions in its policy interest rate in 2019, the dollar is like to stay stronger during the new year. This indicates the possibility of the currency factor staying unfavourable for NR.
The global economic outlook and anticipated developments in the crude oil market do not favour a recovery in NR prices in 2019. According to the Energy Outlook released on December 11, 2018 by the US Energy Information Administration, Brent crude oil is anticipated to average at $61 per barrel in 2019, considerably lower than the preliminarily estimated average of $71.40 in 2018. The NR market usually tracks the crude oil trends with very few exceptions.
In short, the emerging world economic trends, supply-demand fundamentals, currency factor, and crude oil outlook indicate that the possibility is remote for NR prices to bounce back in 2019. https://www.bagesfutbol.net/
Published on January 04, 2019
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