Studies conducted by the Board point to a surge in prices. This is based on the ground realities that there is the economy is on the path of recovery and the tyre industry is performing better. To add to these has been the cut in production by rubber-producing countries like Indonesia, Malaysia and Thailand.

Sources in the board and also Rubbermark feel that if the present trend continues, by the turn of the year the whole of surplus will be wiped out.

Up to 1997, rubber was imported to meet the demands of the tyre industry. This had led to a surge in prices of the commodity. The slackening in the tyre industry soon reflected on the rubber prices which declined in a major way to fall by over Rs 25 a kg. The present scenario is unlikely to help synthetic rubber manufacturers. Here too, the situation favours the rubber growers, say board sources. For, with the hike in oil prices, synthetic rubber manufacture will become a costly venture, they add. It is believed that production cost is likely to jump by 75 per cent.

Though the peak season has set in, rubber production is unlikely to go up as with the onset of the north-east monsoon, followed by the lean period by the beginning of the year, there is not going to be much tapping. During the rains, there is little tapping now. Except for large-scale planters, small-time growers do not use rain guards. Hence, for a good period there is little tapping of the trees, leading to a fall in production. This will be offset by the consumption domestically, sources maintain, leasing to a wiping out of the surplus. Estimates are that during this fiscal there may be a total production of 6.5 lakh tonnes. Surplus is unlikely and even if there remains something, it will be around 25,000 to 35,000 tonnes, they add. Also, domestic prices rule a shade lower than the international prices.

This should be advantageous to domestic producers, according to RubberMark sources.

Major rubber-producing countries have decided to cut down production drastically. They are shifting over to oil palm which is a more lucrative business. Though this will favour rubber producers here, it will spell doom for coconut and other oil producers in the country, they add.

Both the Rubber Board and the RubberMark feel that with regard to futures trade in rubber, they should tread cautiously. They point to the case of Singapore where futures trade was a miserable failure. On the contrary, in rubber-consuming countries like the UK and Japan, this form of trade was a success. Sources said it has to be decided which category India falls into.

Sources say that as India is a rubber-producing country, we should learn from what happened in Singapore.