By Thomas Kutty Abraham
Jan. 29 (Bloomberg) -- Natural rubber demand in India, the fourth-biggest producer, may lag behind a previous forecast as demand from tire producers weakens on declining vehicle sales.
Consumption will total 862,000 metric tons in the year to March compared with 899,000 tons estimated in April 2008, Sajen Peter, chairman of the state-owned Rubber Board of India said in a phone interview from Agartala in north east India.
Natural rubber prices in Tokyo have slumped 57 percent in the past six months on concerns the global recession will weaken demand for the commodity used in tires. Commercial vehicle sales in India fell 16 percent during April-December period, according to Society of Indian Automobile Manufacturers.
“We may see a pick up in demand from 2010 when the global economy is expected to recover because of government spending,” Peter said.
Waning demand may boost stockpiles to 198,000 tons by March, 21 percent more from a year ago, said G. Mohana Chandran, joint director at the state-owned Rubber Board.
February-delivery rubber on India’s National Commodity & Derivatives Exchange Ltd. gained 10 rupees to 7,025 rupees per 100 kilograms yesterday. Prices may trade between 70 rupees to 130 rupees a kilogram by year-end, Peter said.
Production in the year ending March may fall to 861,000 tons, less than the 875,000 tons estimated in April, Peter said. Output totaled 669,080 tons in the April-December period.
Exports this year may total 48,000 tons, up from 41,000 tons shipped till the end of December.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.
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