May 16, 2020
We write this editorial as the covid-19 lockdown is gradually lifting across the world. Three to five months into the coronavirus pandemic, depending on where in the world one lives, and it still seems like there are more questions than answers. Despite there still being no vaccine and no cure for the coronavirus, countries are opening up slowly, so their economies do not get decimated any further. Political leaders and heads of corporations are attempting to strike a balance between financial sustainability and protecting the health of their citizens/employees. The response of various governments across the globe has ranged from exceptional to shambolic and it is not clear how much support the global rubber industry will get internally from the authorities as we attempt to weather this crisis.
In the irjournal’s home base, India, Prime Minister Narendra Modi recently announced an economic package of $26 billion (Rs. 20 lakh cores) as a relief measure during the coronavirus pandemic. This package is intended to boost economic activity which has screeched to a near-halt during the lockdown, which started on March 26.
$26 billion or Rs 20 lakh crores is equivalent to 10% of India's GDP, whereas the US relief package amounted to 12% of GDP, France’s relief measures accounted for 11% of GDP, as did Italy’s. Mr Modi said the rescue package would especially benefit the nation’s farmers and migrant workers, with a series of progressive measures intended to boost food security, credit to farmers as well as street vendors. However, some critics and economic analysts allege that of the total Rs 20 lakh crores pledged, Rs 12 lakh crores had already been pledged earlier by the Reserve Bank of India, so the additional amount is only Rs. 8 lakh crores. The Indian economy has been slowing down for the past year, even before the coronavirus outbreak, and at the most optimistic level a recovery can be expected only in the first quarter of 2021.
India now awaits the next official announcement on May 18, when it is thought more restrictions will be lifted, especially those concerning the operation of railways, air travel and buses. India Inc. is eagerly awaiting the free flow of commerce to resume and for the economy to operate at full throttle again. However, the coronavirus outbreak is not under control in some parts of the country, so the next few weeks will be very critical for India. The country's rubber growing sector, which was already suffering on account of low rubber prices, is now dealing with stockpiles that have built up over the lockdown and is calling on the government for support. Indian tire makers are reeling from low demand due to an auto industry which saw zero sales in the month of April, and the effect of replacement tire sales slumping due to movement restrictions during the lockdown. The only way now is up!
As for the global rubber industry, there has been much re-calibrating and downwardly revising advisories for financial performance in 2020..whilst also being reminded that there are opportunities to be seized and this could be just the time to streamline, to re-focus on core needs and to emerge from the coronavirus even better than before, as ETRMA puts it. The rubber and rubber-related industry has risen to the occasion to help in the battle against the coronavirus- from the automakers producing ventilators and face shields, to the companies producing personal protective equipment and products for hospital and those generously donating PPE, disinfectants, whatever is required at the frontlines in the fight against covid-19, donating masks, gloves, bikes to healthcare workers. We applaud the actions of all these companies and look ahead to green shoots of recovery.
March 20, 2020
As the world battles the coronavirus pandemic, our daily reality has become surreal.
There is little we can say which has not already been said: these are uncharted waters, these are exceptional circumstances, this is unprecedented.
There are few in the world who have been unaffected by the impact of this global outbreak and of course this includes all of us in the global rubber industry.
We can only hope that pausing the global economy and closing borders for a while will avert a devastating health care crisis and prevent further loss of life.
We at the irjournal remain fully committed to our mission of connecting you with the global rubber industry, without compromising the well-being or values of our collective community. Working from home, we hope to bring you updated news as the situation continues to unfold.
From the deluge of information on the internet, which has probably exhausted you, we hope to focus on content which is of value, to keep you updated and connected.
March 13, 2020
Stock exchanges across the world continue to fall daily in stock exchanges in US, Japan, UK, Europe and Singapore. India’s Sensex has dropped 32000 from 42000 days ago.
The USA is injecting 1 trillion dollars whilst Japan, ECM and UK are also adding sizeable stimulus amounts. India’s RBI is giving a swap of US$ 2 billion.
The silver lining is that India’s forex reserves are at a record high at US$ 487 billion which takes care of nearly 3 years of Import bill. The fall in crude oil prices from $65 to $32 per barrel will also help the Indian Economy.
March 03, 2020
India Inc. Still Open for Business
As was noticed at last week’s International Tire Technology Expo 2020 in Hannover, Germany, many companies in the global rubber industry have been hit badly by the economic uncertainty resulting from the coronavirus crisis, especially those in China. News of the high numbers of people infected in Italy have increased apprehensions in Europe, and most major multi-national companies are advising against non-essential travel.
As of this writing, the Indian rubber industry has been relatively unaffected and as the 4th largest rubber industry in the world, is attracting increasing attention from overseas. The economic stimulus measures announced by the Indian government in February, as well as the fact the country has so far not been severely impacted by the coronavirus crisis, means that India Inc. is still very much open for business. With factories in China shut down for an extended period and only now starting to reopen, the reality is that work is being picked up in other parts of the world, including India.
But it is safe to say that this is uncharted territory. Given the inter-connectedness of the global economy and the rapid spread of the coronavirus, the impact on the global rubber industry is undeniable and deeply worrying. Given the uncertainty over just how bad things will be before they improve, we can only be positive and wish good health for all in the industry and all who are dear to them, especially in China, Italy, Iran, Japan and South Korea.