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Rubber hit hard by de-mon blow for Kerala

Both direct and indirect impacts, like the inability to pay wages and slowing consumption from the auto sector, is causing nervousness among India’s rubber growers

Published: 19th December 2016 06:20 AM  |   Last Updated: 19th December 2016 06:20 AM   |  A+A-

Express News Service

KOCHI: Kottayam, Kerala, produces more than 75 per cent of all natural rubber in India. And the situation on the ground, during this second week of December, 2016, is not promising. Demonetisation and the chaos it has wrecked on the economy has not overlooked rubber. The problems that Thankachan, a rubber plantation owner from Ayamanam in Kottayam, has faced during the last few weeks is an example of what the entire industry has been afflicted with.

Thankachan has been trying to start tapping in his plantation, but has run into a problem — workers do not accept cheques. Thankachan pointed out that he had approached a few with an offer — work and take half of the rubber produced. But the offer was easy to refuse, he admitted. They could not sell the rubber sheets, and even if they could, they would get only cheques from the dealer.

Other plantation owners are also facing similar issues. When his workers asked for Rs 10,000 as an advance on their wages to go to Sabarimala, Indian Rubber Growers Association General Secretary Sibi J Monippally could only give Rs 4,000. Another factor making life difficult is the latest from the automobiles sector, where demand and sales have taken a huge hit. Natural rubber is used more in commercial vehicles tyres and these sales plunged 11.58% in November. “Since November 8 it is not easy to get workers for tapping. Many growers had just resumed tapping after a bad few months due to a price fall,” said Tomy Abraham, President, Indian Rubber Dealers Federation. Eapen, a small grower in Kottayam, said that the impact has been most felt among slaughter tappers (tapping before cutting trees) and re-planters.

The timing has been particularly galling because the sector had been recovering from stiff competition from imports. Current international prices are Rs 20 to 30 per kg more than domestic produce. But the cash crunch has wiped out possible gains from the situation.
India is anticipated to produce 654,000 tonnes of natural rubber, in 2016-17. But might not achieve the target if the unavailability of notes continues. “Though there is an acute crisis regarding payment of wages, there is no visible fall in tapping. If the situation sustains, there may be an impact on overall production,” said Sibi J Monippally. Rubber price was Rs 103 per kg in the first week of January this year, the current price is Rs 138 per kg, having risen Rs 9 per kg in just a week.



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