By Rahul Dhuri
MUMBAI – The most-active March contract of rubber on the Indian Commodity Exchange ended at a two-week low of 12,579 rupees per 100 kg, down 1.03% from the previous close, tracking the fall in the benchmark contracts on Tokyo Commodity Exchange in early trade, traders said.
Futures contracts of rubber on TOCOM fell over 2% in early trade and were down for the third consecutive trading day due to a rise in global output of natural rubber, analysts said.
Output of natural rubber rose 4.6% to 13.96 mln tn in 2018, according to a report by the Association of Natural Rubber Producing Countries.
However, the most-active August contract on the Japanese bourse ended marginally higher at 199.5 yen (124.97 rupees) per kg tracking gains in crude oil contracts on New York Mercantile Exchange. Rubber prices take cues from those of crude oil because the latter is used to manufacture synthetic rubber, a substitute for natural rubber.
In Thailand, RSS-3 grade rubber was down $1.28 at $172.80 per 100 kg. In Malaysia, the SMR-20 grade variety was down $3.05 at $145.75 per 100 kg, according to data from India’s Rubber Board.
Back home, gains in prices of natural rubber in the key spot markets of Kerala limited the downside in contracts on ICEX. Prices of rubber rose in spot markets of Kerala today due to a supply crunch in the market and a rise in demand from domestic stockists, traders said.
Rubber tapping in Kerala has almost ended and is creating a supply crunch in the market, said Joy Alencherry, the owner of Kottayam-based Maria Rubber Links.
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.
In Kottayam and Kochi, the RSS-4 variety was quoted at 128-129 rupees per kg, up by 1 rupee from the previous close. However, data from Rubber Board showed that the RSS-4 variety was quoted at 127.50 rupees in Kochi and Kottayam, down 0.50 rupee in both markets.
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 TOCOM are likely to rise in the coming days as Thailand, Indonesia, and Malaysia, the top three global natural rubber producers will cut exports by 240,000 tn over a period of four months starting Apr 1, the International Tripartite Rubber Council said in a release on Wednesday.
Expectations of a rise in global market and supply crunch in the domestic market is seen lifting rubber contracts on ICEX, traders said. End
US$1 = 69.99 rupees
Edited by Maheswaran Parameswaran