While global natural rubber prices have slipped below USD 2 per kilogram, India’s domestic rubber market has surged to its highest level in 12 years, marking a record-breaking milestone for the industry.
According to the Rubber Board of India’s daily price bulletin, the Ribbed Smoked Sheet (RSS 4) variety was quoted at ₹200 per kg (USD 2.38/kg) in June and later reached USD 2.90/kg in Kottayam, the country’s key trading hub.
A Diverging Trend Between Global and Indian Markets
Table of Contents
This sharp divergence underscores contrasting market fundamentals between India and the rest of the world.
Earlier this year, global rubber prices had surged amid supply concerns from Vietnam and Thailand, where severe drought conditions disrupted tapping activities.
However, these supply fears have now been replaced by weaker demand expectations, causing global prices to retreat.
Weaker Demand from China Weighs on Global Rubber Prices
More than 70% of all natural rubber is consumed in the automotive tire industry, where China plays a dominant role as both the world’s largest importer and consumer.
The slowdown in China’s domestic demand — particularly the decline in automobile sales, including electric vehicles (EVs) — has directly contributed to the downward pressure on global rubber prices.
Traders note that this demand slump coincides with the post-pandemic restructuring of China’s auto industry and the gradual shift toward synthetic rubber alternatives, further dampening natural rubber imports.
Indian Producers Enjoy Price Strength Amid Limited Supply
In contrast, Indian rubber farmers and traders have enjoyed a period of strong local prices, supported by tight domestic supply and increased procurement from major tire manufacturers.
Dealers report that JK Tyres and CEAT have been actively purchasing rubber sheets at ₹250–255 per kg, after their inventory levels dropped sharply.
Meanwhile, companies like MRF and Apollo Tyres have stayed away from the market as prices crossed ₹232 per kg, waiting for a correction.
The seasonal monsoon, which limits tapping in Kerala — India’s main rubber-growing state — has further tightened supply, helping sustain higher local prices despite the global decline.
Outlook: Divergence Likely to Continue
Analysts expect the price gap between Indian and global markets to persist in the short term, reflecting India’s unique supply constraints and strong domestic demand from the tire sector.
However, long-term sustainability will depend on:
-
The resumption of normal tapping operations post-monsoon;
-
China’s demand recovery trajectory; and
-
The balance between domestic production and imports as tire makers adjust sourcing strategies.