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MUMBAI: Indian natural rubber futures are likely to fall this week on profit-taking, driven by sluggish demand from tyre makers, though thin supplies are seen limiting the downside.
As of 1118 GMT, the key January rubber contract on the National Multi Commodity Exchange was down 0.8 percent at 16,483 rupees per 100 kg, after rising 4.6 percent last week.
“Tyre makers are not active. They have comfortable inventories. They will wait for prices to correct before increasing buying,” said a dealer based at Kochi in the top producing Kerala state.
The spot price of the most-traded RSS-4 rubber (ribbed, smoked sheet) in Kochi rose by 122 rupees to 16,282 rupees per 100 kg.
Rubber production in India peaks during October-January and starts falling from February.
“The supply situation is tight. Many farmers expect prices to go up in the coming weeks.
They are holding back their produce,” the dealer said.
Tyre makers are reducing their dependency on local supplies and increasing imports, dealers said.
India’s imports of natural rubber jumped 41 percent in November from a year earlier, to 22,748 tonnes, as lower overseas prices prompted tyre makers to look abroad, the state-run Rubber Board said.
The country is likely to produce 942,000 tonnes of natural rubber in the current year, up from 899,400 tonnes a year earlier.
Source: Reuters
