Author: M.G. Satheesh Kumar, Deputy Director, Marketing, Rubber Board.
Reference: Dr. K.N. Raghavan IRS is the Executive Director of the Rubber Board.
Rubber export discussions have intensified as international prices moved above domestic prices.
A review of the rubber market over the last ten years makes one thing clear – except for a few occasions, the price of sheet rubber in the domestic market was always higher than in the international market.
It was after January 15 that the international price started to rise above the Indian market price. As the price continued to rise, last month the international price was up to Rs 45 higher than the domestic price. However, the true picture will only emerge after analyzing the situation of various types of rubber trade as well.
Latex, TSR or block rubber, and sheet rubber – rubber is mainly traded in these 3 forms. Indian farmers mostly produce various grades of rubber sheets. That is, 60-65% of the total production. However, in the international market, block rubber has more demand.
Latex
One of the 3 main forms in which rubber is traded.
TSR or block rubber
Block rubber has more demand in the international market.
Sheet rubber
Indian farmers mostly produce various grades of rubber sheets.
Our farmers have a great interest in exporting the maximum tonnes of rubber. That change can happen if the Board’s recommendation or more is announced.
Those in the trading sector say that the current situation can be resolved if tire companies are made partners in the Board’s market price guarantee scheme. The Board has already formed a 10-member committee to discuss export possibilities.
Restarting export depends on buyers, trade links and simplified procedures.
The challenge we face is that rubber export has not been necessary. There are two reasons for this.
- ✅ One, the international price was always low.
- ✅ Two, domestic consumption was higher than production.
In this situation, the Rubber Board, companies, and export traders were forced to stop foreign trade.
If the long-stalled export is to be restarted, some hurdles need to be crossed—first, new traders must be found. Someone has to buy rubber sheets after understanding the lower price in the Indian market.
In this matter, neither the government nor the Rubber Board can do anything. However, it is possible to coordinate and simplify procedures in a way that avoids export hurdles. For this, the Board’s export cell has already been revived. The only reason for the delay in exports right now is the inability to find an agency willing to buy rubber from India.
The fact that the amount of rubber traded as sheet rubber in the international market is negligible must also be taken into account. Moreover, those who buy rubber sheets will make a decision only after studying the Vietnam and Cambodia markets as well.
A clear picture of rubber prices in these countries is not available. However, there is only an indication that their interests and prices are lower than the Indian price.
Long-term understandings between buyers and exporters, who calculate the price difference and share half the profit, also influence the rubber trade. Since Indian exporters have been inactive in the international market for a long time, trade relations will also be few. Therefore, it may take more time for new trade agreements to be formed.
Nevertheless, efforts for rubber export need to be intensified. If the current price difference continues and the international price remains higher than the Indian price for at least the next 6-7 months, exporters will get more opportunities.
Opportunities can be capitalized on only if precautions are taken. If exports become a reality, it will be a great boost for the domestic rubber market. Traders and farmers will become more active.
Why is rubber export important for Indian farmers now?
Rubber export has become important because the international price rose above the Indian market price after January 15. Last month, the international price was up to Rs 45 higher than the domestic price. If this gap continues, exports can support the domestic rubber market and make traders and farmers more active.
What are the main forms of rubber traded in the market?
Rubber is mainly traded in 3 forms: latex, TSR or block rubber, and sheet rubber. Indian farmers mostly produce various grades of rubber sheets, which account for 60-65% of total production. However, block rubber has more demand in the international market, creating a trade mismatch for Indian exporters.
Why was rubber export not necessary for many years?
Rubber export was not necessary for two major reasons. First, the international price was usually lower than the Indian domestic price. Second, domestic consumption was higher than production. Because of this situation, the Rubber Board, companies, and export traders were forced to stop foreign trade for a long period.
What is delaying rubber exports from India right now?
The main delay is the inability to find an agency willing to buy rubber from India. If exports are restarted, new traders must first be found. The Rubber Board can coordinate and simplify procedures, and its export cell has already been revived, but it cannot force buyers to purchase Indian rubber.
Why is sheet rubber export more difficult internationally?
The amount of rubber traded as sheet rubber in the international market is negligible. Buyers of rubber sheets are also likely to study the Vietnam and Cambodia markets before deciding. Since clear price information from those countries is limited, and their prices may be lower, Indian exporters may need more time to form new trade agreements.
How can tire companies help the rubber export situation?
Those in the trading sector say the current situation can be resolved if tire companies are made partners in the Rubber Board’s market price guarantee scheme. Such participation could help stabilize expectations, support trade confidence, and create a better platform for farmers and exporters when international prices remain favorable.
What could happen if rubber exports become a reality?
If rubber exports become a reality, it will be a great boost for the domestic rubber market. The article notes that traders and farmers will become more active. Exporters will get more opportunities if the current price difference continues and the international price remains higher than the Indian price for at least 6-7 months.
