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`Diversification must in rubber sector'

By Our Staff Reporter

KOCHI DEC. 20. Experts participating in a two-day conference on enhancing competitiveness of the rubber industry have expressed cautious optimism over the future of the commodity. While representatives from abroad stressed on a host of factors affecting the fortunes of the industry, the Indian speakers laid emphasis on scientific farming and innovation.

The programme, organised by the Confederation of Indian Industry (CII) in association with the Rubber Board and Indian Rubber Institute (IRI), was inaugurated by the Agriculture Minister, K.R.Gouri. S.M. Desalphine, Chairman, Rubber Board, said India was the third largest producer of natural rubber, accounting for 9.14 per cent of the global production. The country's productivity at 1,592 kg per hectare per year was the highest among the major rubber producing countries. The production sector in the country was dominated by small holdings occupying 88 per cent of the total area under rubber cultivation. More than 40 per cent of the small holdings yielded less than 1,000 kg per hectare, which meant R&D inputs were essential, he said. Large-scale replanting of low yielding plantations with higher yielding varieties along with adoption of scientific cultural practices would have a significant impact. Value addition of rubber wood was necessary to enhance the economic viability of rubber plantations. Rubber industry was an important segment of the national economy contributing nearly 1.5 per cent of the GDP, he added. L.V. Saptharishi, former Additional Secretary, Ministry of Commerce & Industry, underlined the need for essential strategies to help plantation crops sector. A floor price was required to ensure production cost.

Primary growers should realise that diversification was needed for an additional income. As the consumer had become the focal point in the modern trade, export and value addition assumed key roles. In this context, he said a balancing of the interests of the grower and the user industry was necessary. A voluntary dialogue between the producer and the end-user would be ideal, according to him. There was a need to develop centres of excellence in the industry. As exports had become an integral part of the rubber industry, efforts should be made to ensure quality standards. He exhorted the industry to dominate in production, export and value addition.

In her inaugural address, Ms. Gouri said that in a globalised economy, pricing of any commodity depended on market forces. It was essential for all the stakeholders to have cutting edge technology and remain competitive. Quality of rubber products alone would ensure better price and governmental intervention would only play a small role in global rubber trade, she said. However, she promised to adopt measures that would help the rubber sector.

K.K.M. Kutty, Chairman, CII Southern Region, said core competencies were built on core products and rubber had a promising role as the size and penetration of the sector were huge. The next five years would exert unprecedented pressure on India's economy and strategies were needed to tackle them at every stage, he said. Speaking on the trends in the rubber industry, Sandana Dass, Managing Director & CEO of R1 International, Singapore, said the use of synthetic rubber had declined by 10 per cent in the Nineties, but the trend might change. Rubber consumption was registering a steady increase by about 6 per cent every year. The consumption was expected to touch 20.5 million tonnes by 2005. A possible shortage could not be ruled out, he said. At present, the top three tyre manufacturers in the world accounted for 50 per cent of the rubber consumption. By 2008, these companies might consume up to 80 per cent of rubber. But again, this development depended on the auto industry, which had registered tremendous growth in the recent past. The rubber price outlook depended on factors such as world economic growth, demand, supply, availability of synthetic rubber, market activities, political situation, Government intervention and currency movement. In fact, the prices of rubber looked up after huge funds moved into the commodities sector, he said. In the long-term, the average price of rubber would be $1,500, according to him. N. Sreekumar, Chairman, CII-Kerala, and P.K. Mohamed, Chairman, Indian Rubber Institute, also spoke.

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