[Geojit Comtrade] Daily report on Natural Rubber: January 22, 2013

MARKET COMMENTARY

Trend continued to stay on the weaker side in the Indian natural rubber market. On Monday, natural rubber was seen stretching losses weighed down by muted demand from major natural rubber consuming sector amidst rising production. Fall in natural rubber prices in the leading overseas market added further pressure on prices. However, trickling arrivals is likely to cushion the falling prices. In the physical market, RSS4 was quoted as low as Rs.159 a kg in the Kottayam markets while NMCE rubber futures dipped to its weakest since mid-December.

In the overseas market, natural rubber is seen rebounding after the previous session declines. TOCOM rubber futures rose following an initial dip. Moves by Bank of Japan setting two per cent inflation target rate and shifting to an open-ended asset purchases lifted prices. SHFE and AFET rubber futures are seen rising too.

MARKET NEWS

As a part of price support program, Thailand spent 17.4 billion baht to buy 182446 tonnes of rubber. Also, the Cabinet approved plan by Rubber Estate Organization to disburse 5.0 billion baht from the Bank for Agriculture and Agricultural Cooperatives to continue the program.

Rubber inventories in the warehouses monitored by SHFE declined 0.1 per cent to 101303 tonnes.

China’s GDP rose to 7.9 per cent in the Q4 of 2012 on a YoY basis following seven straight quarters of slowdown. Industrial production recorded a growth of 10.3 per cent in December while retail sales rose 15.2 per cent during the same period on YoY basis.

According to Thai Deputy Agriculture Minister, the govt. was intending to continue the rubber intervention scheme until it expires in March. Rubber stocks held by the Thai govt. rose 18 per cent from November to 200000 tonn

TECHNICAL VIEW

RUBBER Feb NMCE

Broad Trend: Weak

Near Term: Sideways to Negative.

TURNAROUND