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Saturday 6 September 2014

Low rate of natural rubber: rubber growers are in crisis!

My few colleagues and relatives who owns rubber plantation have been heard as saying that rate of natural rubber has come down to a lowest level in recent times. Some of them even doubting in very continuance of the activities in the rubber plantation due to low rubber price and higher recurring expenses in maintaining the plantation and producing the marketable natural rubber products.
Although I did not give much importance until one of my friend’s narration in regard to the grim condition of the natural rubber market in the locality especially in the rubber growing areas of Tripura. Some non-reliable sources even claimed that few large plantation owners who have stock piled the natural rubber sheets worths to lakhs of rupees still could not offload that stock to the market due to sliding price of natural rubber.
In recent times, rate of natural rubber (rubber sheet) in the local market has come down to Rs.100.00 to Rs.110.00 per kilogram or even less than Rs.100.00 in some areas. Some rubber growers even fear that the existing rate may further slide down in future, and in that case sustaining of rubber plantation will become a burdensome for the plantation owners.
It is said that the local market rate of natural rubber depends on the national markets, and movement in national market also depends on the international markets.  The prevailing market condition so far as natural rubber is concerned is very volatile; rather it is deteriorating in every passing day.
And, volatile natural rubber price in the local as well as national market is causing the concern to the rubber plantation owners of all states or as the case may be. There has been constant news story on the plight of rubber growers due to sliding natural rubber price. It is learnt that present market condition is even forcing to some rubber growers to temporarily stop tapping of latex to evade the market glut and those who continues with  suffers the loss due to low prices of natural rubber.
Some of the rubber growers have even expressed that they sometimes finds no buyers for their natural rubber let alone the better price. It is also heard as saying that problem is more prominent to the rubber growers who have just started tapping the rubber tree. Latex production in the beginning stage of tapping that is within the period of 7(seven) to 10(ten) years of tapping is said to be yielding less than the potential yield therefore mismatch in return and cost of production of marketable natural rubber sheets.
The present market onslaught has made helpless to many rubber growers of the state. Many rubber growers are now remembering the sweet memories of good old days when they sold their products i.e. natural rubber in almost double the existing rate in the local market. It is indeed right that during the year 2011, rubber growers had earned good profit from their plantation as rate of per kilogram of natural rubber in the month of May, 2011 in the grade of RSS-4 and RSS-5 were Rs.234.00 and 232.00 respectively.
Whereas, present price of natural rubber (as on 05-09-2014) as per information indicated in the website of the Rubber Board of India were Rs. 126.50 and Rs.122.00 per kilogram in the grade of RSS-4 and RSS-5 respectively. And, the price indeed is very low compare to buoyant rate that had been recorded during the year 2011 particularly in the month of May, 2011 which was around 232.00 to 234.00 per kilogram for RSS-5 and RSS-4 grades of natural rubber respectively.
Rate of natural rubber as on 05-09-2014(Kottayam)
Sl.No
Grade
Unit
Rate
1
RSS-4
1.00 Kilogram
126.50
2
RSS-5
1.00 Kilogram
122.00
3
ISNR-20
1.00 Kilogram
106.50
4
Latex(60% DRC)
1.00 litre
89.45

Whereas, rate of natural rubber prior to 3(three) years on all grades were almost double the rates that have been seen in recent times. Let us see the rate of natural rubber that has been recorded during the month of May, 2011.
Rate of natural rubber as on May, 2, 2011(Kottayam)
Sl.No
Grade
Unit
Rate
1
RSS-4
1.00 Kilogram
234.50
2
RSS-5
1.00 Kilogram
232.50
3
ISNR-20
1.00 Kilogram
224.50
4
Latex(60% DRC)
1.00 litre
144.15

On the prevailing market rate, rubber growers are at great loss: they are in fact losing a huge money compare to year 2011. This is questioning to some small rubber growers in sustaining with the production activities by employing a rubber taper and others who take a considerable sum on monthly basis, in addition, there are some other recurring expenses that comes on the way from tapping of latex to the marketable rubber sheets or liquid latex.
When we compare the income of the 2(two) periods (as mentioned above), we will be able to see exactly how much a rubber grower is losing in the prevailing market condition , details given below:-
Income from 1(one) ha rubber plantation during May2011
Sl.No
Particulars
Unit
Rate
Total
1
2
3
4
5
1
Rubber sheet production per hectare
1800 to 1900 Kilograms
Rs.234.50   (RSS-4)
Rs.422100.00 to Rs.445550.00
2
Taper
10 months
6000.00 per month
Rs.60000.00
3
Fee for sheet making
Rs.2.00 per sheet
4000 to  4222 sheets
Rs.8000.00 to Rs.8444.00
4
Drying of rubber sheets etc

Rs.10000.00
Rs.10000.00
5
Recurring cost towards chemicals and others etc

Rs.10000.00
Rs.10000.00
6
Total


Rs.334100.00 to Rs.375106.00

Now, let us see what the income as per prevailing market rate is:
Income from 1(one) ha rubber plantation as 05-09-2014
Sl.No
Particulars
Unit
Rate
Total
1
2
3
4
5
1
Rubber sheet production per hectare
1800 to 1900 Kilograms
126.50   (RSS-4)
Rs.227700.00 to Rs.240350.00
2
Taper
10 months
6000.00 per month
60000.00
3
Fee for sheet making
Rs.2.00       per sheet
4000 to  4222 sheets
Rs.8000.00 to Rs.8444.00
4
Drying of rubber sheets etc

Rs.10000.00
Rs.10000.00
5
Recurring cost towards chemicals and others etc

Rs.10000.00
Rs.10000.00
6
Total


Rs.139700.00 to Rs.151906.00

What is the income difference between May, 2, 2011 and September, 5, 2014?
The difference is huge and astounding; and the loss; loss is whopping Rs.194400.00 (Rs.334100.00 – Rs.139700.00) to Rs.223200.00 (Rs.375106.00 – Rs.151906.00) per hectare of productive rubber plantation.
If it is the income difference of now and then; then it is quite grim and serious, and serious to analyze and find out the better path for decreasing the widening gap income difference of now and then.
But then what is the position of rubber growers in comparison to others involve in agriculture profession?

N.B:  This content may not be used as reference; all rates or currency etc are indicated in INR. Rate of natural for the month May,2,2011 and September,5,2014 have been collected from the website of Rubber Board of India, and I give due credit to the source