Spot rubber prices for RSS 4 grade have risen from Rs 18100 per 100 kg to Rs 19500 so far this month after witnessing bearish trend for a prolonged period of time. Rubber Board data shows monthly production has declined 12.9% to 54000 tons in June amidst heavy rains which has disrupted tapping work in major growing areas. With heavy rains continuing in July, production is set to fall even as consumption has dropped to 82,000 tons compared to 83,930 tons a year ago.
KOTTAYAM, INDIA (Commodity Online): Natural rubber prices have gained close to 8% in spot markets in India in July till date on supply concerns and gain in crude oil prices in recent weeks, analysts said.
Spot rubber prices for RSS 4 grade have risen from Rs 18100 per 100 kg to Rs 19500 so far this month after witnessing bearish trend for a prolonged period of time. Rubber Board data shows monthly production has declined 12.9% to 54000 tons in June amidst heavy rains which has disrupted tapping work in major growing areas. With heavy rains continuing in July, production is set to fall even as consumption has dropped to 82,000 tons compared to 83,930 tons a year ago.
Meanwhile, the uptrend in Tokyo Commodity Exchange was reversed this week as Japan’s currency rebounded causing demand to weaken for Yen-denominated futures. At TOCOM, December delivery Rubber futures rose to a high of 244.6 Yen but fell 6.7 Yen to 238.6 yen per kg in the morning session. In the evening session, prices have fallen further to 235.5 Yen, a loss of 2.9 yen per kg.
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The yen traded at 99.29 per dollar after climbing to 98.27 yesterday, the highest level since June 27. The Japanese currency rebounded after Federal Reserve Chairman Ben S. Bernanke said on July 10 the world’s biggest economy will continue to need stimulus for the foreseeable future.
Weakening trend in crude oil prices also impacted sentiments in TOCOM.
At India’s National Multi Commodity Exchange, Rubber for August delivery has declined 1.53% to 18511 per 100 kg. An RSI of 50 suggests a neutral trend while MACD is in positive territory and destined to close lower than open. Seasonal weakness in production coupled with steady consumption demand could provide firm support for prices.
In May, production was 59,000 tonnes. Cumulative production for first quarter (Q1) of FY14 was 166,000 tonnes, against 172,700 tonnes in Q1 FY13, a fall of 3.9 per cent. Normally monsoon season is good for tapping as cool atmosphere favours better yield. But heavy rainfall disrupted tapping and processing in all the producing centres of Kerala.
Source: Commodity Online
