Rubber at Rs 300, but relief remains elusive for Keralam''s growers
Kottayam (Keralam) | Natural rubber has crossed the Rs 300-a-kg mark in the country for the first time, bringing a long-awaited price recovery to Keralam's growers.
But the record high has exposed a deeper contradiction in the state's rubber economy-- while farmers welcome better prices, rising cultivation costs, a shortage of skilled tappers and declining yields continue to eat into their earnings.
At the other end of the supply chain, latex processors and rubber-product manufacturers are struggling with soaring raw material costs and cheaper imports.
The latest prices released by the Rubber Board show RSS-4 (Grade One) at Rs 300 a kg, RSS-5 at Rs 294, SNR-20 at Rs 280 and latex with 60 per cent Dry Rubber Content (DRC) at Rs 197.60.
Rubber Board Chairman N Hari said the price had reached a historic high, fulfilling a long-standing expectation of rubber farmers.
For growers who have spent years dealing with falling prices and increasing expenses, the Rs 300 mark is an important psychological boost. But the relief comes with several conditions.
Tony P Emmanuel, a rubber farmer from Elanji in Ernakulam district, knows how much the economics of rubber cultivation have changed. His family has been growing rubber for nearly five decades. Of the 10 acres of land they own, rubber is cultivated on five acres.
He said Rs 300 a kg might appear to be a good price when viewed in isolation.
The biggest problem, he said, is the shortage of workers willing to tap rubber trees. The availability of Malayali workers has declined sharply, leaving farmers struggling to find people for one of the most essential jobs in rubber cultivation.
Tapping is not just another farm activity. It requires skilled workers to make precise cuts on the bark of rubber trees so that latex flows without damaging the tree.
The work begins in the early hours of the morning and demands regular attention. Without enough tappers, farmers cannot make full use of their plantations.
Climate change has added to their difficulties. Changes in rainfall and temperature have affected production, with the yield from an acre of rubber plantation falling to nearly one-third of what it was 15 years ago, Emmanuel said.
Even a farmer with 10 acres of land can no longer depend on rubber cultivation as a financially rewarding livelihood, he said.
"Even if the price rises to Rs 500 per kg, the sector will continue to face a crisis because of labour shortages and declining productivity," Emmanuel told PTI.
His assessment reflects a larger problem facing Keralam's rubber economy. A higher market price does not automatically mean higher earnings when the quantity produced is falling, and the cost of harvesting and maintaining plantations is rising.
The rising cost of fertilisers and other agricultural inputs has further reduced the margin available to growers.
For rubber tappers, however, the price increase offers a possibility of better earnings. Many begin work around 3 am, moving from tree to tree before the day gets hot.
Their income depends largely on the number of trees they tap and the wages farmers can afford to pay.
But the celebration among growers has been accompanied by anxiety elsewhere in the rubber value chain.
Martin Joseph, a latex processor from Pala in Kottayam district, said the sharp rise in natural rubber prices was pushing latex processing units and manufacturers of non-tyre rubber products into an increasingly difficult situation.
His company collects field latex from farmers, processes it into concentrated centrifugal latex and supplies it to manufacturers. But the cost of buying and processing the raw material has risen beyond the price at which the finished material can be sold.
The company has incurred losses of around Rs 80 lakh over the past four months alone, he said.
"Unless manufacturers can pass on the increase in raw material prices to consumers, they will either have to shut down their operations or struggle to survive," Joseph told PTI.
The problem is particularly serious for manufacturers of latex-based products such as gloves, balloons, condoms and rubber bands. Unlike the large tyre companies, many of these businesses have limited bargaining power and find it difficult to pass on higher production costs to customers.
Joseph said sheet rubber prices had increased by an estimated 60 to 70 per cent compared with last year, reaching around Rs 300 to Rs 302 a kg. The prices of chemicals used in manufacturing had also risen by 25 to 50 per cent.
The pressure comes from both sides. Manufacturers have to pay more for raw materials and chemicals, while the prices they can charge for finished products are constrained by competition from imported goods.
Joseph also pointed to what he described as an imbalance in import duties.
At the same time, finished latex-based products can enter India under certain trade agreements with import duties of zero or five per cent.
He said cheaper imports, particularly from countries such as China, were making it harder for domestic manufacturers to compete.