Substantial import of mostly compounded rubber, shutdowns for holidays, and slow tyre sales have combined to bring down natural rubber prices in the domestic market, say rubber sellers here.
The price of RSS4 grade in the Kottayam market stood at ₹201 a kg on Monday. Rubber had averaged ₹212 a kg for the months of June, July, August, and September, said George Valy, president of Indian Rubber Dealers’ Federation.
He said that traders were in a fix about sales because they had sufficient stocks and pointed out that despite claims to the contrary, farmers should get at least ₹200 a kg to incentivise them to produce more.
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He also said that though there were industry complaints about a shortage in the market earlier this year, rubber was an agricultural produce that depended on weather and other conditions for normal production.
There was also high volatility in the international market triggering speculations as varying reports were emanating from rubber-producing countries and major markets, Mr. Valy added.
The sharp dip in price now is attributed to substantial imports. According to Mr. Valy, August imports stood around 75,000 tonnes, and in September, it was 61,000 tonnes.
There is also a marked improvement in the availability of rubber after Onam holidays, and the industry has cited several reasons for the slowdown in demand. Rubber tapping picked up momentum after Onam as most farmers installed rain guards and started tapping in earnest.
According to Rubber Board data, the price of RSS 4 averaged ₹200 in June, ₹210 in July, ₹237 in August, and ₹229 in September. The rates have come down to ₹201 a kg as on Monday.
