Natural rubber supply deficit in India- What is driving it and how to manage it?


By: Silpa Naiju --

15 July, 2013

Natural rubber supply deficit in India- What is driving it and how to manage it?

Over the next 7 years large scale expansions of Bridgestone, Michelin, and Yokohama are expected to happen in various parts of India triggering a demand pull for natural rubber feedstock. Currently there is a severe shortage of natural rubber in the Indian market with the deficit of close to 87,000 MT/year in 2012 and it is definitely clear that India, with its current supply source, will not be able to serve any new tire expansions. Also if the natural rubber buyer has to rely on domestic supply, he will have to pay a higher price, thereby affecting his profit margin. The challenge faced by expansion projects in India in the coming years would be twofold: 1. The supply deficit of its main raw material, i.e. natural rubber which is expected to reach 8 lakh MT/year by 2020. 2. Seasonal disruption of natural rubber supply, which is more pronounced in India than in any other major NR producing nation, as it is the only region which faces 2 lean periods ï¾Ãƒâ€šÃ‚Æ’?? wintering and monsoon. Tire companies in India will have to rely on imports to meet its NR requirements. This white paper provides a comparative analysis of the various major NR producing regions in South East Asia. It covers the seasonal risk analysis for each region to help the NR buyer in India to adopt an optimal sourcing strategy in the coming years.


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