By Priya Singh
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Updated On: 03-Jul-2024 02:27 PM
In 2023-24, India produced 8.5 lakh tonnes of natural rubber, while consumption was at 14.2 lakh tonnes.
Key Highlights:
Natural rubber, the primary raw material for tyre manufacturing, is in short supply in India and arrives at irregular periods. The Automotive Tyre Manufacturers Association (ATMA) has informed the Rubber Board about the crisis.
"The tyre industry has been experiencing tightness in domestic availability of natural rubber for some time," said ATMA Director General Rajiv Budhraja. The industry organization has notified the Rubber Board of its intention to boost natural rubber availability in order to avoid plant shutdowns and production delays.
Impact on Major Companies
ATMA represents 95% of the tyre industry in India, including major companies like Apollo Tyres, Bridgestone India, CEAT, Goodyear India, JK Tyres, and MRF. These companies rely heavily on natural rubber for various products such as tyres, tubes, hoses, conveyor belts, foam mattresses, footwear, balloons, toys, and engineering applications.
Engineering applications include shock absorption, vibration isolation, and road paving. The automotive industry consumes around 70% of all natural rubber produced.
Production vs. Consumption
In 2023-24, India produced 8.5 lakh tonnes of natural rubber, while consumption was at 14.2 lakh tonnes. The domestic stock of natural rubber was 3.7 lakh tonnes at the start of the current financial year, down from 4.4 lakh tonnes the previous year. According to data from the Rubber Board, the average price of natural rubber in March was Rs 177 per kilogram.
Despite natural rubber prices reaching multi-year highs, Budhraja warned that the industry is facing a severe raw material shortage. The group also stated that some natural rubber producers or merchants may be holding the material in expectation of a future increase in the commodity's price.
In FY24, India imported 4.9 lakh tonnes of natural rubber, with Indonesia, Vietnam, and Cote d’Ivoire being the major suppliers. However, imports might coincide with peak domestic production, complicating the supply situation.
India's domestic tyre industry is one of the world's largest, producing more than 200 million units each year across a variety of categories such as two-wheelers, passenger vehicles, commercial vehicles, and off-road vehicles. The industry aims to double its export value by 2030, targeting Rs 50,000 crore from the current Rs 23,000 crore.
Also Read: JK Tyre's Chennai Plant Achieves International Sustainability & Carbon Certification
Government and Industry Collaboration
Prime Minister Narendra Modi has urged the rubber industry to collaborate with farmers in order to curb imports. Four major tyre manufacturers, represented by the tyre association, have pledged Rs 1,100 crores for rubber plantations on a total of 2 lakh hectares in the North Eastern states to boost domestic output.
CMV360 Says
The natural rubber shortage is a big problem for India's tyre industry, affecting production and the economy. While importing more rubber can help for now, the best solution is for the government and industry to work together to grow more rubber locally. This will make the industry self-sufficient, keep prices stable, and help it compete globally.