By Rahul Dhuri
MUMBAI – The December contract of rubber on Indian Commodity Exchange ended a tad up due to bargain buying by market participants after prices hit a six-week low of 12,500 rupees per 100 kg, on Tuesday, analysts said.
The December contract ended at 12,541 rupees per 100 kg, up 28 rupees from Tuesday.
However, overall sentiment in the rubber market remains bearish, tracking weakness in benchmark contracts on Tokyo Commodity Exchange, and due to a fall in the prices in key spot markets of Kerala, said Murugesh Kumar, product manager at Inditrade Derivatives and Commodities Ltd.
Futures contracts of rubber on TOCOM hit an over two-year low of 159.6 yen (104.39 rupees) per kg due to concern over a rise in global supply, analysts said.
Global rubber production is anticipated to rise 5.8% on year to 14.69 mln tn in the current year, according to media reports.
The most-active April rubber contract on the Japanese bourse ended down 0.7% at 161.8 yen per kg.
Weakness in contract of natural rubber on Shanghai Futures Exchange and concern over a slowdown in China’s economy further contributed to the downside.
Inventory of rubber at warehouses in Shanghai Futures Exchange had touched an all-time high of 591,599 tn last week.
In Thailand, RSS-3 grade rubber was down $2.07 at $138.26 per 100 kg and in Malaysia, the SMR-20 grade was down 90 cents at $124.75 per 100 kg, according to data released by the Rubber Board of India.
Meanwhile, rubber prices in spot markets of Kerala fell today due to expectation of a rise in supply and lackluster demand, traders said.
The market is expecting good supply in November and December after months of decline, traders said.
There is a lot of selling pressure because rubber producers are eager to dispose off stocks amid falling international prices, said an official with a Kochi-based rubber trading company.
Tyre companies are also not active in the domestic market as they have already imported significant quantity of the commodity. Besides, importing technically specified rubber from Indonesia is cheaper compared with local prices, the official said.
In Kottayam, the widely-traded RSS-4 variety of rubber was sold at 124-125 rupees per kg today, down one rupee, traders said.
According to Rubber Board of India data, prices of the RSS-4 variety in Kochi and Kottayam was largely unchanged at 125.5-126.0 rupees per kg respectively.
Today’s closing prices of rubber, in rupees per kg, at Kottayam and Kochi, 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 | 126.00 | Unch | 125.50 | Unch |
| RSS-5 | 120.50 | (-) 0.50 | 120.50 | (-) 0.50 |
| ISNR-20 | 114.50 | Unch | NA | NA |
| Latex | 89.80 | (-) 1.10 | NA | NA |
OUTLOOK
The overall trend in the rubber market is likely to remain bearish and rubber prices are expected to fall in the coming week, tracking weakness in benchmark contracts on Tokyo Commodity Exchange and due to expectation of better availability of the commodity by mid-November, traders said. End
US$1 = 73.95 rupees
Edited by Mainak Moitra
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