India may overtake US, Japan in natural rubber use as demand rises from producers of automobile tyres, gloves

Print this page Posted on : 06-07-2008 by recycleinme.com

Soaring demand for rubber in China, the fastest-growing major economy, and India may help sustain the rise in natural rubber prices.

India may become the world's second-largest consumer of natural rubber in seven years, overtaking the US and Japan, as demand rises from producers of automobile tyres and gloves. Demand in the world's second-fastest growing major economy may reach 1.44 million tonnes by 2020, up from 8,99,000 tonnes forecast for the current year, Mr Sajen Peter, Chairman of the Rubber Board, told a conference in Manila today.

Soaring Demand

"Consumption of industrial materials is positively related to growth in the gross domestic product," Mr Peter said. The country may consume more rubber than Japan "in a couple of years" and overtake the US by 2015, he said. Soaring demand for rubber in China, the fastest-growing major economy, and India may help sustain the rise in natural rubber prices. Prices reached 343.8 yen a kg on May 27, the highest since April 1980, as record crude oil prices made synthetic rubber more expensive and China boosted purchases. "The market will remain tight through 2014," Mr Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries, told reporters. Expansion by members of the body, which accounts for 94 per cent of global output, may bring in additional supplies starting 2012, he said.

Global Demand

The US is the world's second-largest user of the commodity, accounting for 10 per cent of global demand, followed by Japan at 9 per cent. China accounts for 26 per cent of demand, Mr Jacob said. India's natural rubber output may rise by 6 per cent to 8,75,000 tonnes in the year to March 31, 2009, from a year earlier, as mid-summer rains improve prospects for higher yields, Mr Peter said May 8. Kerala, which makes up more than 90 per cent of the country's output, received the highest rainfall in 133 years in March. India's economy has expanded an average 9.2 per cent since April 2006, the quickest rate since independence in 1947. That prompted General Motors Corp, Nissan Motor Co and other carmakers to invest a combined $6 billion in Indian plants, likely stoking demand for new and replacement tires. "India's economy is poised to continue its robust growth," Mr Peter said.

Source : Business Line