Tyre industry facing natural rubber supply crunch, ATMA urges action

Source : PTI | New Delhi: Automotive Tyre Manufacturers’ Association on Wednesday said its members are witnessing a ‘severe crunch’ in the availability of domestic natural rubber and it may disrupt production unless supply issues of the raw material are addressed. Despite high prices of natural rubber (NR), its availability has shrunk, Automotive Tyre Manufacturers Association (ATMA) said, expressing apprehension that some “sections of natural rubber producing interests or trade are withholding the material in anticipation of an increase in the NR prices worsening the availability”.

The “tyre industry has been experiencing tightness in domestic availability of natural rubber for some time. However currently a severe crunch is being witnessed despite the fact that NR prices have touched a multi-year high. The paucity of natural price needs to be addressed at the earliest so that tyre production processes are not disrupted,” ATMA Director General Rajiv Budhraja said in a statement.

The Rubber Board had estimated the total domestic natural rubber stock available in the country at 3.7 lakh tonnes at the start of the current fiscal, it said, adding that “unfortunately, the visibility of such a high stock to support domestic demand is not there”.

“The uncertainty in availability of NR, the key raw material, makes production planning at tyre plants very challenging. Being customer-centric, tyre companies need to meet the local and global requirements irrespective of shortage of any local material,” Budhraja said.

Stating that the tyre industry accounts for over 70% of natural rubber consumed in the country, ATMA said, “Imports (are the) only option to address unpredictability”.

“Consuming interests have no option but to increase reliance on imports of natural rubber to bridge the huge deficit. However, imports contracted now, with no visibility of local arrivals, may arrive subsequently and may coincide with peak domestic production season,” it added.

ATMA said it has asked the Rubber Board to closely monitor the volume of domestic NR sales transacted in recent weeks and advise growers, dealers and processors to ensure adequate and uninterrupted availability of natural rubber so that the consuming interests are not adversely impacted.