By Rahul Dhuri
MUMBAI – The most-active September contract of rubber on Indian Commodity Exchange settled at a three-month low of 13,650 rupees per 100 kg, down 1.5% from Friday, due to expectations of a rise in imports of natural rubber, traders said.
However, gains in benchmark rubber contracts on the Tokyo Commodity Exchange and a rise in prices in key markets of Kerala prevented a sharp fall on the domestic bourse, said Joy Alencherry, owner of the Kottayam-based Maria Rubber Links.
The January natural rubber contract on TOCOM today hit a two-week high of 174.4 yen (around 116.7 rupees) per kg, tracking firm cues from crude oil contracts on New York Mercantile Exchange, analysts said. Prices of natural rubber take cues from those of crude oil as the latter is used to make synthetic rubber.
Crude oil prices on NYMEX rose nearly 1% today as the Organization of the Petroleum Exporting Countries cut its outlook for non-OPEC supply growth in 2019 and 2020, analysts said. Crude oil futures also rose after a Houthi group in Yemen launched an attack on Saudi Arabia’s oilfield, escalating tensions in the region.
Prices of natural rubber in the key markets of Kerala rose due to expectation of lower arrivals in the coming days amid fresh demand from domestic stockists, traders said.
“Heavy rains have hampered rubber-tapping in key growing areas. The deluge in the state is likely to hit rubber production,” said an official with Rubber Research Institute of India.
In Kochi and Kottayam, prices of the widely-traded RSS-4 variety were at 146-147 rupees per kg, up 1 rupee from Saturday, traders said. However, data from the Rubber Board showed the RSS-4 variety in Kochi was at 143.00 rupees per kg, down 1 rupee from the previous close. In Kottayam, it was quoted at 143.50 rupees down 0.50 rupee.
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 futures on ICEX are likely to extend their fall in the coming days due to expectations of higher imports of the commodity amid sluggish demand from tyre makers. However, a likely fall in arrivals is likely to prevent a sharp decline, traders said. End
US$1 = 71.43 rupees
Edited by Avishek Dutta