Severe natural rubber shortage threatens India’s tyre sector

New Delhi, August 2 (KNN) There has been a severe shortage of natural rubber in the current fiscal year, threatening to disrupt India’s tyre manufacturing sector.

The Automotive Tire Manufacturers Association (ATMA) reports that actual availability of natural rubber in June 2024 was only 30,000 tonnes, significantly below the forecast of 60,000 tonnes.

The crisis deepened in July, with ATMA reporting a near-total halt in natural rubber sales for most of the month. This shortage had a broad impact on the entire rubber industry, affecting both small and medium-sized enterprises and large tire manufacturers.

Rajiv Budhraja, CEO of ATMA, underlined the gravity of the situation, saying, “Some tyre factories of ATMA member companies have witnessed a decline in production by more than 10 per cent in July due to the natural rubber crisis. Production planning is in complete chaos.”

He also explained that the shortage has forced companies to redistribute imported natural rubber, which can only be delivered through two ports, between different plants in order to maintain operations.

The All India Rubber Industries Association (AIRIA), representing around 5,000 small and medium rubber manufacturing companies, has also expressed concern.

AIRIA President Shashi Kumar Singh highlighted the particular vulnerability of SMEs that lack the resources to maintain large inventories.

The situation is further complicated by the fact that industry representatives have questioned the accuracy of the natural rubber stock figures provided by the Rubber Board, pointing to discrepancies between the figures reported and reality.

Singh noted that despite domestic natural rubber prices reaching a 13-year high, which should theoretically boost supply in the market, a shortage persists.

The crisis has prompted calls for the Rubber Board to reassess its stock position. In addition, smaller rubber players are grappling with the dual challenge of domestic shortages and high import tariffs on natural rubber.

As the situation evolves, the Indian rubber and tyre industry faces an uncertain future, with potential implications for the broader automotive sector and related industries.

(KNN Office)