By Rahul Dhuri
MUMBAI – Rubber contracts on the Indian Commodity Exchange ended higher today as market participants bought at a bargain after prices hit a six-month low of 14,425 rupees per 100 kg recently, traders said. The most-active August contract ended at 14,575 rupees per 100 kg, up 0.5% from the pervious close.
However, a fall in benchmark rubber contracts on Tokyo Commodity Exchange in early trade and bearishness in the spot markets of Kerala capped the gains on ICEX, said A.M. George, owner of the Kerala-based George Rubbers.
In early trade, the most-active January contract of rubber on TOCOM hit an eight-month low of 160.70 yen (around 106.90 rupees) per kg.
Concerns on global growth due to escalating trade tensions between the US and China, the world’s two largest economies, are likely to weigh on demand for the commodity, said Anu Pai, a research analyst at Geojit Financial Services.
However, worries over a fall in output are expected to prevent a major downside. Key growing areas for rubber in southern Thailand have turned drier in the past couple of weeks, which may affect rubber production. Thailand is one of the largest producers of rubber.
In Thailand, the price of the RSS-3 variety fell $3.19 to $147.40 per 100 kg, according to Rubber Board data. In Malaysia, the price of the SMR-20 variety rose by 21 cents to $131.10 per 100 kg.
Prices of natural rubber in the key markets of Kerala fell today due to expectations of a rise in arrivals in the coming days, traders said.
Due to favourable weather conditions in rubber-growing regions, fresh arrivals of rubber are likely to hit the market by mid-August and gain momentum by the month-end, which will weigh on prices, said Santhosh Kumar, a senior official at The United Planters’ Association of Southern India.
Tepid demand from tyre makers also weighed on prices, traders said.
In Kochi and Kottayam, the widely-traded RSS-4 variety was sold at 145-147 rupees per kg, down 1 rupee from the previous day, traders said. Data from the Rubber Board showed the RSS-4 variety was quoted at 145.50 rupees per kg, down 1.00 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 ICEX are likely to remain under pressure in the coming five-six sessions, tracking bearishness in benchmark rubber contracts on TOCOM, analysts said. End
US$1 = 70.81 rupees
Edited by Avishek Dutta