By Rahul Dhuri
MUMBAI – Futures contracts of rubber on the Indian Commodity Exchange ended weak today due to a surge in imports and tailing the fall in benchmark contracts on the Tokyo Commodity Exchange, traders said.
On ICEX, the most active December contract settled at 12,124 rupees per 100 kg, down 0.3% from close on Monday.
India’s natural rubber imports jumped to 356,255 tn in Apr-Oct from 263,221 tn during the same period a year ago, according to data from the Rubber Board.
Subdued demand from domestic stockists and tyre manufacturers also weighed on prices, said Joy Alencherry, the owner of Maria Rubber Links based in Kottayam.
In Kochi and Kottayam, key markets in Kerala, the widely-traded RSS-4 variety of rubber was sold for 114-115 rupees per kg, down 1-2 rupees from Monday, traders said.
However, according to data from the Rubber Board of India, price of the RSS-4 variety was largely unchanged at 118.00 rupees per kg in both Kochi and Kottayam.
Weakness in the benchmark contracts on TOCOM also weighed on prices in the domestic market, said
Narendranath Dharmaraj, director of Harrisons Malayalam Ltd.
Rubber futures on TOCOM fell today because of a strong Japanese yen against the US dollar, and tracking weakness in the benchmark contract on Shanghai Futures Exchange, analysts said.
A strong Japanese currency makes the yen-denominated rubber costlier for overseas buyers.
The most-active April rubber contract on TOCOM ended 0.3% lower at 154.1 yen (96.04 rupees) per kg.
Weakness in crude oil futures on New York Mercantile Exchange further contributed to the fall. Rubber prices take cues from those of crude oil as the latter is used to manufacture synthetic rubber, a substitute for natural rubber.
Subdued demand from China because of the trade war with the US also kept prices on TOCOM under pressure, said Anu V. Pai, a research analyst at Geojit Financial Services.
In Thailand, the price of RSS-3 grade rubber was down 50 cents at $133.61 per 100 kg, while in Malaysia, the SMR-20 grade was down 10 cents at $122.75 per 100 kg, according to Rubber Board.
However, a fall in domestic production and a decline in the stocks are likely to prevent a sharp fall in prices, Dharmaraj added.
Acute shortage of natural rubber has led to a decline in stock. At the end of October, rubber stocks stood at 255,000 tn against 262,000 tn in October 2017.
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 previous close are given in the following table:
| KOTTAYAM | KOCHI | |||
| GRADE | PRICE | CHANGE | PRICE | CHANGE |
| RSS-4 | 118.00 | Unch | 118.00 | Unch |
| RSS-5 | 114.00 | 0.50 | 114.00 | 0.50 |
| ISNR-20 | 107.00 | (-)0.50 | NA | NA |
| Latex | 82.40 | (-)1.10 | NA | NA |
OUTLOOK
Futures contracts of rubber on ICEX are likely to remain under pressure on global cues, traders said.
However, a fall in domestic output and decline in the stocks are likely to arrest any significant
fall in prices, they said. End
US$1 = 70.76 rupees
Edited by Rashmi Sanyal
