MUMBAI, Nov 5 (Reuters) – Indian natural rubber futures are likely to extend losses this week, following losses in the world market, weak demand and a pick-up in tapping in the top producing state as weather becomes favourable.
Tokyo rubber futures tumbled more than 3 percent to a 1-1/2-month low on Monday, as investors trimmed long positions to cut their exposure to riskier assets ahead of the U.S. presidential election, dealers said.
The key December rubber contract on India’s National Multi Commodity Exchange was down 1.5 percent at 17,575 rupees per 100 kg at 1015 GMT.
The spot price of the most-traded RSS-4 rubber (ribbed, smoked sheet) at the Kochi market in the top producing Kerala state fell 68 rupees to 17,519 rupees per 100 kg.
“Prices can slightly come down from the current level. Usually around this time, tyre makers increase buying, but this year, they are buying conservatively due to higher imports,” said a dealer from Kottayam, Kerala.
India’s natural rubber imports in September rose nearly 16 percent on the year to 14,779 tonnes, the state-run Rubber Board said in a statement.
Rubber imports could hit a record 22.5 percent of the country’s total consumption in 2012/13 as a widening gap between local and overseas prices prompts tyre makers to bring in imports even during the peak domestic production season.
Last fortnight, rubber tapping was disturbed in some places in Kerala due to rainfalls, but it has gained pace with weather becoming favourable, said George Valy, president of the Indian Rubber Dealers Federation.
Rubber production in India peaks during October-January and starts falling from February.
India is likely to produce 942,000 tonnes of natural rubber in the current year, up from 899,400 tonnes a year earlier.
(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)
Source: Reuters
