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DAILY NEWS ANALYSIS

  • 16 September, 2022

  • 7 Min Read

About Natural Rubber

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.

Image Source - Wikipedia

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.

Also, Read - Exercise Kakadu

Source: The Hindu


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