By Rahul Dhuri
MUMBAI – Expectation of a rise in output of rubber amid tepid demand from tyremakers and domestic stockists dragged down rubber contracts on Indian Commodity Exchange to a six-month low of 12,531 rupees per 100 kg, down 1.7% from Monday.
The price has declined by 1,744 rupees per 100 kg from last week.
The country’s rubber output in 2019-20 (Apr-Mar) is seen at 750,000 tn, against 651,000 tn in the previous year, the head of Karvy Comtrade said.
India’s automobile industry, the largest consumer of rubber, has been in a downturn for over the past 12 months, largely because of subdued demand.
In the spot markets of Kerala, prices of natural rubber hit a four-month low, said Raju Varghese, the owner of Polachirayil Traders based in Kottayam.
Today, in the key markets of Kerala, the widely-traded RSS-4 variety was sold at 134-135 rupees per kg, down 1 rupee from the previous close, traders said. However, Rubber Board data showed that in Kottayam and Kochi, the RSS-4 variety was sold at 133.00 rupees per kg, down by 3 rupees from the previous level.
Expectation of a further rise in the imports of the commodity also weighed on sentiment. Imports of natural rubber rose 27.4% on month to 50,940 tn in July, data from the Directorate General of Commercial Intelligence and Statistics showed.
However, expectation of a delay in arrivals during the peak season, Oct-Dec, prevented a sharp fall in rubber prices, said Thaha Mohamed, the owner of Kottayam-based Sara Traders. Rubber arrivals are likely to be delayed in key markets of Kerala as tapping activity is yet to gain pace.
On the global front, benchmark rubber contract on Tokyo Commodity Exchange, rose tracking key contracts on the Shanghai Futures Exchange, analysts said.
The February contract of rubber on TOCOM had hit a four-week high of 172.9 yen (around 114.7 rupees) per kg, in early trade today. However, the contract ended down 0.6% at 172 yen.
In Thailand, prices of the RSS-3 variety rose by 17 cents to $154.15 per 100 kg, according to Rubber Board data. In Malaysia, price of the SMR-20 variety rose $2.16 to $137.00 per 100 kg.
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:
Prices of rubber are seen falling in the spot and exchanges over the next five-six sessions due to expectation of higher production this season and weak demand from domestic stockists, traders said. End
US$1 = 71.78 rupees
Edited by Boris Pradhan