Rubber Prices Soar Amid Supply Fears

Natural rubber prices have seen a significant increase, reaching ₹221 per kilogram in the Kottayam market as of March 31, 2026. This upward trend is fueled by a combination of domestic and international factors, primarily concerning supply chain stability. Extreme temperatures in key rubber-growing regions had previously hampered production. However, the recent onset of summer rains has provided a slight improvement in agricultural conditions across parts of the Central Travancore belt. Adding to the market pressure are geopolitical tensions in West Asia. Traders fear that any escalation could disrupt the supply of essential imported inputs, including chemicals and synthetic rubber, vital for the manufacturing industry. Higher crude oil prices also indirectly boost natural rubber prices as synthetic alternatives become more expensive. Furthermore, a political development is influencing farmer behavior. A promise made during a campaign in Kottayam suggests a potential support price of ₹250 per kg, with a planned increase to ₹300 per kg, incentivizing farmers to delay sales in anticipation of better prices. The tyre industry has also shown reduced activity in sourcing domestically due to fears of global shipping route disruptions affecting raw material availability.