Ms Sheela Thomas, secretary general of the Association of Natural Rubber production (ANRPC), the crisis in the natural rubber market India reflects the trend of the world. Only when the international rubber price increase could improve the situation of the Indian rubber market.
Ms Sheela Thomas - Secretary General of the Association of Natural Rubber production (ANRPC)
What led to the decline in the price of natural rubber in India?
Natural rubber market in India connected with the international market in terms of both imports and exports.
The price of natural rubber in the world market decreased from 2013 due to various factors. Mainly due to the global economic slowdown, particularly in China, where about 40% of global rubber consumption. Although the Americas and Europe are on the road to recovery, the recession continues in China and other developing countries in Asia. Rubber plantation on a large scale implementation in the period 2005 - 2010 has led to a significant increase in production in recent years from the high productivity areas. Due to low prices, at present, the supply of global natural rubber almost stagnant. When prices increase and become more attractive to farmers, supply could increase even more.
Low crude oil prices have impact on the rubber industry?
The consequence of the sharp fall in oil prices from about $ 140 to $ 40 a barrel, is made of synthetic rubber from crude oil become more attractive alternative to natural rubber and thereby cheaper due to pressure reduction natural rubber prices.
On the other hand, the currency of the countries in the region (Thailand, Indonesia and Malaysia) has fallen in recent years, increasing competition among exporters of natural rubber.
The increase in prices in 2011 is due to speculation?
One of the factors that helped rubber prices peaked in 2011 due to unprecedented levels rise too high speculation. The hedge funds have a profound effect on the determination of prices of commodities and natural rubber is no exception.
Many hedge funds have shifted from goods to the US dollar, saying the US Federal Reserve may raise interest rates. This leads to global commodity prices continues to drop and natural rubber also follow the general trend of prices of other goods.
Natural rubber imports may affect the Indian rubber industry?
The import of natural rubber in India are concerned with the price on the international market. A WTO member countries are not allowed to limit the amount of imports. In free trade, imports shall comply with the laws of the market, like water flowing under the laws of gravity, flow from high to low.
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