By Rahul Dhuri
MUMBAI – The most active March contract of rubber on the Indian Commodity Exchange hit a one-week low of 12,731 rupees per 100 kg today, tracking benchmark contracts on the Tokyo Commodity Exchange, traders said.
On ICEX, the March contract settled at 12,781 rupees per 100 kg, down 1.1% from Friday’s close. Markets were shut on Monday on account of Mahashivratri.
Rubber contracts on TOCOM were down due to a rise in global production of natural rubber, while weakness in crude oil prices on the New York Mercantile Exchange also added to the downside. Rubber prices take cues from crude oil because the latter is used to manufacture synthetic rubber, a substitute for natural rubber.
Natural rubber output across the globe rose 4.6% to 13.96 mln tn in 2018, according to a report by the Association of Natural Rubber Producing Countries.
On the Japanese bourse, the most active August contract of rubber settled at 205.6 yen (129.44 rupees) per kg, down 0.3% from the previous close.
However, gains in spot markets of Kerala cushioned any sharp fall on ICEX. Prices of rubber in spot markets of the state rose today due to a supply crunch amid improved demand from stockists, traders said.
In Kottayam and Kochi, the RSS-4 variety was quoted at 128-129 rupees per kg, up 1 rupee from the previous close, traders said. However, data from Rubber Board showed that the RSS-4 variety was quoted at 128.0 rupees a kg in Kochi, while in Kottayam, it was quoted at 128.5 rupees, unchanged in both markets.
Rubber tapping in Kerala has almost ended, which is seen adding to the supply crunch, said Raju Varghese, owner of Kottayam-based Polachirayil Traders.
In January, India’s natural rubber output was at 72,000 tn, down 1,000 tn from the year-ago period, according to data released by Rubber Board.
The following table shows today’s closing prices of rubber, in rupees per kg, as detailed by the Rubber Board, and the change in prices, in rupees, compared with the previous close:
Rubber contracts on ICEX are likely to rise in the week ahead due to the ongoing supply crunch in the market amid rising demand from domestic stockists, traders said. Expectation of a pick-up in demand from tyre manufacturers is also seen supporting rubber prices, they added. End
US$1 = 70.49 rupees
Edited by Akshit Harsh