By Rahul Dhuri
MUMBAI – Futures contracts of rubber on the Indian Commodity Exchange are likely to extend losses in the coming weak, tracking benchmark contracts on the Tokyo Commodity Exchange and a fall in prices in key spot markets of Kerala, analysts said.
On ICEX, the most active December contract was at 12,490 rupees per 100 kg, down 69 rupees from Monday. Rubber prices fell 23 rupees last week.
Futures contracts of rubber on TOCOM hit an over two-year low of 159.0 yen (102.32 rupees) per kg today following concern over demand from China, analysts said.
The most active April rubber contract on the Japanese bourse was down 0.1% at 159.7 yen per kg.
Rise in global production of natural rubber and a fall in benchmark contracts on the Shanghai Futures Exchange weighed on sentiment. Benchmark rubber contracts on Shanghai Futures Exchange had hit a three-week low on Monday.
Meanwhile, a fall prices of natural rubber in the key spot markets of Kerala is also seen weighing on rubber contracts on the domestic bourse, traders said.
Prices of natural rubber in the spot markets of Kochi and Kottayam are also likely to fall in the coming days on expectation of higher arrivals coupled with tepid demand from domestic buyers, said Kurian Abraham, a rubber trader.
In Kochi and Kottayam, the widely-traded RSS-4 variety of rubber was today sold in the range of 125-125.5 rupees per kg, down 0.50 rupee from Monday, Abraham said.
The outlook for rubber, however, remains weak because the recent heavy rains in southern India and Sri Lanka will mostly favor rubber plantations, market participants said.
But expectation of a pick-up in demand from tyre manufacturers from next week is likely to cushion the fall in prices, Thaha Mohamed, owner of Sara Traders based in Kochi said.
In the spot markets of Kerala, prices are seen moving in a range of 121-123 rupees per kg in the coming weeks, traders said.
On ICEX, the December contract of rubber may find support at 12,300 rupees per 100 kg, and face resistance at 12,700 rupees in the next few sessions, market experts said. End
US$1 = 73.03 rupees
Edited by Rashmi Sanyal