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Tuesday, October 26, 2021

India Rubber: Settles up on ICEX as output falls, demand seen rising

By Rahul Dhuri

MUMBAI – Rubber futures rose today on the Indian Commodity Exchange due to a fall in India’s rubber output in January and on expectation of a rise in demand from stockists, traders said.

On ICEX, the most-active March contract settled at 12,938 rupees per 100 kg, up 0.6% from Wednesday’s close.

In January, India’s natural rubber output was at 72,000 tn, down by 1,000 tn from the year-ago period, according to Rubber Board data released today. 

Rubber production in Kerala, which accounts for over 80% of the domestic output, has slowed because low prices have led to a decline in tapping. Unfavourable weather conditions have also led to a fall in yield, traders added.

However, in spot markets of Kerala, prices of rubber were largely unchanged as demand from domestic stockists and tyre manufacturers was negligible amid limited arrivals, they said.

Demand from tyre companies for the domestic stock is subdued as they have already imported sufficient quantity of rubber.

In Kottayam and Kochi, the RSS-4 variety was quoted at 126-127 rupees per kg, unchanged from Wednesday, traders said. Data from Rubber Board showed that the RSS-4 variety was quoted at 127.0 rupees a kg, up 0.50 rupee, in both Kochi and Kottayam. 

On the global front, futures contracts of rubber on Tokyo Commodity Exchange were marginally lower during early trade as the yen strengthened against the dollar, analysts said. A firm Japanese currency makes the yen-denominated rubber costlier for overseas buyers.

However, hope of a likely trade deal between China and the US, and gains in contracts on the Shanghai Futures Exchange due to a fall in rubber inventories at exchange-accredited warehouses restricted the downside. China is the largest consumer of rubber.  

The most-active August contract on the Japanese bourse settled at 200.9 yen (128.44 rupees) per kg, largely unchanged from the previous close.

In Thailand, RSS-3 grade rubber was up $1.67 at $170.40 per 100 kg. In Malaysia, the SMR-20 grade variety was up $1.10 at $148.40 per 100 kg, according to data from India’s Rubber Board.

Today’s closing prices of rubber, in rupees per kg in Kochi and Kottayam, as detailed by the Rubber Board, and the change in prices, in rupees, compared with the previous close are given in the following table:

KOTTAYAM

KOCHI

GRADE

PRICE

CHANGE

PRICE

CHANGE

RSS-4

127.00

0.50

127.00

0.50

RSS-5

122.00

Unch

122.00

Unch

ISNR-20

120.00

Unch

NA

     NA

Latex

82.40

(-)0.55

NA

     NA

OUTLOOK

Rubber contracts on ICEX are likely to extend gains in the coming week due to a fall in India’s rubber output and on expectation of a rise in demand from domestic stockists. End

US$1 = 70.72 rupees

Edited by Subham Mitra

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