About Natural Rubber

Farmers and other groups have recently protested because the price of natural rubber (NR) in the Indian market has dropped to a sixteen-month low.

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What is the reason behind the sudden drop in prices?

• Insufficient Demand and Other Factors because of low Chinese demand, the energy crisis in Europe, and excessive inflation.
• While the industry has paid a heavy price because of China's relentless zero COVID agenda, which accounts for around 42% of worldwide volume.
• Export to other nations: The local tire business has a plentiful supply of block rubber from the Ivory Coast and compounded rubber from the Far East.
• 73.1% of the total amount of natural rubber consumed was used in the auto-tire manufacturing industry.

How does the Farmer be affected by the Falling Price?

• Crop Switching: Since the majority of people in rural areas are exclusively dependent on the production of rubber, they may decide to switch to other crops as a result of the price decline.
• It can even result in the division of rubber holdings.
• Impact on Small and Medium-Sized Businesses: The majority of production is carried out by small and medium-sized businesses, thus the price decline could make their future uncertain and cause them to temporarily halt operations.
• Panic in Kerala: Since the state produces over 75% of the total amount and rubber production is an important component of the local economy, the state's villages may experience severe panic as a result of the price decline.

About Natural Rubber

• Rubber is produced from the latex of a tree named Hevea Brasiliensis, a commercial plantation crop. A vital industrial raw material with unique status for use in defence, national security, and industrial development, rubber is often regarded as such.
• It is an equatorial crop, although under specific circumstances it may also be grown in tropical and subtropical regions.
• The above-average temperature of 25°C with humid and rainy conditions.
• More than 200 cm of rain.
• Rich, well-drained alluvial soil is the type of soil.
• For this plantation crop, a cheap and sufficient quantity of skilled labour is required.
• Thailand, Indonesia, Malaysia, Vietnam, China, and India are major producers on a global scale.
• China, India, the United States, Japan, Thailand, Indonesia, and Malaysia are major consumers.

Status of Rubber Production in India

• On the banks of the river Periyar in Kerala, the British developed the country's first rubber plantation in 1902.
• With one of the greatest productivity rates, India is currently the fifth-largest natural rubber producer in the world.
• In comparison to 2020–21, the production of the material increased by 8.4% to 7,75,000 tonnes in 2021–22.
• Additionally, it continues to be the world's second-largest consumer of the substance.
• Currently, imports account for over 40% of India's total natural rubber usage.
• The top States for Rubber Production: Kerala, Tamil Nadu, and Karnataka.

Government-led Efforts:

• Two examples of government-led initiatives for rubber are the Rubber Plantation Development Scheme and the Rubber Group Planting Scheme.
• In rubber plantations, 100% Foreign Direct Investment (FDI) is permitted.
• The National Rubber Policy was released by the Department of Commerce in March 2019.
• The policy has a number of provisions that promote the Natural Rubber (NR) production sector as well as the whole value chain of the rubber industry.
• It is based on the short- and long-term plans chosen by the Task Force established in the rubber industry to address issues encountered by the nation's rubber growers.

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