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[Geojit Comtrade] Daily report on Natural Rubber: February 7, 2014

MARKET COMMENTARY

RSS4 in the Indian market was seen reversing its earlier gains on Thursday. In the physical market, the grade slipped to Rs.143 a kg following a rise towards one week high the other day and on NMCE, it culminated the session about two per cent lower. While apprehensions prevailed in the market over the government’s move to buy rubber one rupee above the market rate, the commodity continued to move south in tandem with steep plunges in the international market. Poor demand from the major consuming sector weighed on too.

Following the deep slump in last day towards its weakest level since August 2012, TOCOM rubber futures bounced back on Friday on short covering and upbeat data from the US. AFET rubber futures rose too. In the meantime, SHFE reopened after a week long holiday and the benchmark May rubber futures is on the negative turf after an initial rise.

MARKET NEWS

Kerala Finance Minister, K M Mani, assured that a system will be put in place to ensure legitimate price for rubber and added that the legitimate price will be decided after taking the average of rubber price in the previous years.

Crude rubber inventories at Japanese ports rose 12 percent from 11 days earlier to a near seven-year high of 17,387 tonnes as of Jan. 31, data from the Rubber Trade Association of Japan showed.

International Rubber Consortium and International Tripartite Rubber Council will take “appropriate action” against declines if and when necessary, consortium said on website.

Natural-rubber surplus may narrow to 241,000 tons from 384,000 tons last year if global economic growth in line with outlook from IMF, according to data from International Rubber Study Group.

The State government has decided to procure rubber directly from rubber growers by paying Re. 1 more than the rates prevailing in the market till the prices climb to Rs.171 a kg.

Union Minister for Commerce Anand Sharma has assured Kerala Chief Minister Oommen Chandy that his Ministry will take steps to protect the interests of rubber farmers, particularly those in Kerala, who have been agitating on the steep fall in the procurement prices of rubber due to imports. He will direct the Central agencies to procure more rubber directly from the farmers.

TECHNICAL VIEW

 RUBBER Mar NMCE

With considerably good support of 14400 being held downside, pullbacks to 14750/15000 ranges cannot be ruled out, though it requires to clear 15100 upside for further rise. Alternatively, sustained trades below 14400 with sturdy volume likely to see weakness strengthening.

TURNAROUND

Resistances

LEVELS

 Supports

14750-14900

15100-14400

14400/14200

15000-15100

14150/14050

15250/15400

13850/13650

 

Source: Geojit Comtrade

Download this report (full content – PDF file) here

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