According to industry estimates, India produced 32 percent lesser natural rubber in July due to heavy monsoon rains that disrupted tapping and annual production could fall by 3%.
MUMBAI/KOTTAYAM (Commodity Online): Rubber prices in India have slumped on increasing imports and major consumers of the commodity, tyre industry keeping away from the market.
This comes at a time when glut in the global market is declining due to rains in India and Malaysia that has caused fall in production of rubber, analysts said. RSS 4 grade rubber prices have dropped sharply from Rs 168.50 per kg to Rs 163.00 per kg this month, according to Rubber Board data.
Meanwhile, Indian rubber growers and the tyre industry are again at loggerheads over rubber imports which has increased 59% in the first six months of 2013.Tyre industry consumes 65% of the total rubber production in the country. Narrowing difference between Indian and international prices have also caused increased import of the commodity, analysts said.
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The Indian Rubber Growers Association (IRGA) has appealed to the government to increase the import duty of natural rubber from the current level of Rs 20 per kg to Rs 34 per kg and to suspend duty free imports for six months to lift the prices of locally available rubber. However, the Automotive Tyre Manufacturers Association (ATMA) has said such a move will throttle the industry which is already passing through a difficult phase due to a slowdown in the automobile sector.
According to industry estimates, India produced 32 percent lesser natural rubber in July due to heavy monsoon rains that disrupted tapping and annual production could fall by 3%.
According to Indian Rubber Growers Association Secretary Siby J Monippally, tyre manufacturers temporarily abstained from the market in the beginning of October creating confusion in the trade. This resulted in the withdrawal of rubber dealers due to lack of buyers in the market. “Already the imports are close to Rs 1.80 lakh tonne when the deficit is just 70,000 tonne. If the trend continues, then 3 lakh tonne of rubber could land in the country by the end of the year upsetting the demand-supply situation and pushing the prices down,” he added.
Global trends
-Meanwhile, globally Tocom futures prices have gained on record automobile sales in China in the first eight months of 2013 gaining 13% on a year-on-year basis while a recovery in global economy is providing firm support for prices. Tocom March delivery rubber futures weakened marginally to 264.7 Yen per kg on Friday morning trade.
-China, the world’s largest natural rubber importer, imported 180,000 metric tons of the material in September this year, 5.9% more than in the previous month but 14.3% less than in the same month of last year, according to the statistics released by the General Administration of Customs.
According to Thai Premier, China has agreed to buy 200000 tonnes of Thai rubber per year. Rubber inventories in the warehouses monitored by SHFE rose 1.2 per cent to 128842 tonnes last week.
-Malaysia production has fallen 11% in the first eight months while Indonesian output is expected to rise by 5.2% to 3.2 mn tons this year, Bloomberg quoting Indonesia Rubber Council said.
Source: Commodity Online
