The (Indian) tire industry has expressed concern over the shortage of rubber in the domestic market stretching throughout the current fiscal. In the past, availability of rubber during the peak production season stretching from September to February was not a major problem. However, during the current fiscal, domestic availability even during the peak production season has been erratic and uncertain, said Rajiv Budhraja, director-general, Automotive Tyre Manufacturers’ Association (ATMA). The peak season (September 2013 - February 2014) production dropped to 518,000 metric tons against 546,500 metric in the corresponding period of the previous fiscal. The consumption increased by over 6,000 metric tons during this period. He said that the extent of drop in production can be assessed from the fact that the Rubber Board had already scaled down the original production estimate twice during the current fiscal from 9.6 lakh metric tons (lt) to 8.7 lt to further 8.5 lt. However, even the revised estimate of 8.5 lt, made as recently as in February is not likely to be achieved as actual production during April-February (11 months) period is just 7.8 lt. In April-February period of 2012-13, the production was 8.6 lt, he said quoting Rubber Board figures. Even though the peak production season has just concluded, the market availability of rubber has been extremely tight leaving tire companies with no option but to import. He said the situation is likely to only worsen as the lean season is ahead. With the expected revival in automobile sector and resultant demand for tires improving in the next fiscal, he said an increase in rubber consumption without a matching increase in production will only make the industry rely on import for this critical raw material.

Source: Hindu Business Line