Solving the data puzzle on India natural rubber fundamentals

Is the Indian Rubber market facing acute shortage of natural rubber?

Is there any problem with the statistical methods that India Rubber Board employs to calculate stocks?

As per the latest figures available with India's Rubber Board, June-end surplus stocks—or stocks that are available for July with traders—stands at 190312 metric tons.

Meanwhile, the anticipated production figures for August and September are pegged at 71200 tons and 80200 tons respectively. Consumption for the same months are estimated to be 77000 tons and 74000 tons.

The table tells that the excess requirement for the month of August and September stands at 5800 tons and 6200 tons respectively. Imports—block rubber and sheet rubber—for the months stand at 17605 tons and 9100 tons. While the scenario of excess demand fades in August due to aggressive imports at 17605 tons, excess demand for September is expected to be at 2900 tons.

Now, as slowdown takes over the global economy, sluggishness is visible with consumption of rubber in offtakes down to 74000 tons for the month of September.

Though data to this end is yet to be made available, one can safely assume that with July surplus at 190312 tons, coupled with global slowdown denting demand, the requirement would be lethargic.

Result: Surplus Rubber in the country

(Quantity in tons)



Addressing the second question: it is often held by industry bodies like ATMA(Automotive Tyre Manufacturers Association) and AIRIA(All India Rubber Industries Association) that rubber board is making a serious statistical error in calculating the stocks in country; that board is taking into account even the already sold stock which is the inventory of various manufacturing companies.

But, as long as natural rubber is kept as it is, as long as natural rubber is not converted to end-product, the board has no other options; but to follow the current methodology in tabulating stocks.

And the Board is providing stock figures in a segregated form in its statistical news bulletin published every month which is available online.

So, the conclusion that Board's 'erroneous' figures may affect policy prescriptions holds no water.

As published in: http://www.commodityonline.com/news/Solving-the-data-puzzle-on-India-natural-rubber-fundamentals-43105-3-1.html