China’s shrewd move amid US tariff blow deals double whammy to rubber sector

Kottayam: The ongoing tariff dispute with the United States is expected to deliver a double blow to the rubber sector, sparking serious concerns among industry stakeholders. With Chinese agencies stepping back, the anticipated recovery in global prices has weakened.

Tire manufacturers could take advantage of the situation by booking large quantities of rubber, potentially doubling imports into India. Although the US has granted China a 90-day relief period on tariffs, Chinese agencies are expecting fluctuations in policy decisions. Though they are taking this stance, the indirect aim is to reduce the global prices.

Chinese agencies account for about 40 to 45 percent of total global rubber purchases. By holding back, they are deploying a strategy to buy at lower prices, a move that could sway the international market. The shipments booked during even more weakest time of the global market continues to arrive in India.

In August alone, 40,000 tonnes of rubber are expected to be imported into India, up from 30,000 tonnes in the previous month. Prices of RSS-4 grade rubber, which had recently traded at ₹213 per kg, have now fallen close to ₹190 per kg. The disputes over tariffs are also causing worries for rubber product manufacturers.

Gloves, mats, and automobile components all of these have a strong market in the US. On an average, India’s rubber industry earns around ₹7,600 crore annually from exports to America.

Countries like Thailand, Indonesia, Malaysia, and Vietnam have reduced production due to heavy rains. Babu Joseph, General Secretary of the National Federation of Rubber Producers’ Associations, said that although the situation should have led to higher prices, the tariff issue has unsettled the market, but profiteering is taking place alongside it.