MARKET COMMENTARY
Natural rubber continues to gallop in the major overseas natural rubber market. On Thursday, TOCOM rubber futures jumped to hit its highest level in more than three years. SHFE rubber futures too pared initial losses and inched up. Expectations of demand from China along with weak yen and worries over supplies from Thailand lend firm support. The Japanese yen weakened against the US dollar after the US FOMC meeting outcome, to its lowest level in ten months. In the local market as well, natural rubber rose in tandem with moves in the major overseas natural rubber market. Quotes for RSS4 in the spot market climbed to its strongest level in more than three and a half months on Wednesday even as trades stayed subdued. Similar moves were witnessed in the futures market as well.
MARKET NEWS
Crude rubber inventories at Japanese ports stood at 5,969 tonnes as of Nov. 30, down 7.2 percent from the last inventory date, data from the Rubber Trade Association of Japan showed.
According to the Association of Natural Rubber Producing Countries global natural rubber prices are likely to stay firm in short term due to stronger crude oil prices and as consumption growth outpaces production. The association said that consumption among its member countries rose 4.3 per cent to 7.387 million tonnes in Jan-Nov while production increased only 0.4 per cent.
The Rubber Board informed that production of natural rubber (NR) in the country showed an increase during the period from April 2016 to October 2016. It has recorded an increase of 10.94 per cent as compared to the production in the same period during the last year. Production during the month of October 2016 alone shows an increase of 15.4 per cent as compared to last year. If this trend continues, production of NR during the fiscal will reach the anticipated 6.54 lakh tonne.
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Geofin Comtrade
