Indian natural rubber prices have sunk to a two-year low on weak demand prospects and higher arrivals, raising concerns of waning tapping interest among growers in the current peak harvest season.

The price of the RSS-4 variety used by the tyre industry is at Rs. 137.5 per kg, a fall of 8 percent in the last couple of months. The decline was heavier this week on reports of the spread of the new variant of COVID-19 in China.

Last time prices touched this level was in October 2020 when the economy was recovering from the first COVID-19 lockdown. Challenging conditions in the international markets have also aided the fall in rubber prices.

"The offtake by the tyre sector is weak, and this is the peak tapping season. Rubber prices had risen very high after the pandemic subsided, and are now seeing a correction", said K N Raghavan, Executive Director (ED), Rubber Board.