Rubber prices steady as demand goes down despite supply crunch

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Rubber prices steady as demand goes down despite supply crunch

Growers and traders estimate that the production could be around seven lakh tonnes, up from 6.91 lakh tonnes in 2016-17.

KOCHI : have stayed steady in India in the past two weeks, unlike in the international markets where the rates have fluctuated, due to subdued demand even as the supply has gone down.

The -4 sheet variety used by the has remained flat at 124 per kg as the tapping season is winding to a close in the largest rubber producing state of Kerala.

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Traders said the , particularly the small scale sector, has been hit hard by the shortage of carbon black, an important raw material for the and non- industry.“The industry is functioning at 50 per cent capacity. Liquidity has been severely affected and we find it difficult to get payments for the supply,’’ said Ashok Khurana, vice president of the Cochin Rubber Merchants Association.

Khurana said while demand has slackened, there is short supply of rubber in the market. The tapping season usually comes to a close by the end of January. But this year intermittent rains at several places in the state helped continue tapping, albeit at a low level.

Traders said that the tapping could have been more intense if the prices had improved. “Most growers are not interested in tapping at such a price,’’ said Biju John, a rubber dealer based in Kottayam.

Rising yen and a fall in prices had led to a fall in prices in the past few days. With international block rubber prices around Rs 30 below the current Indian rubber prices, the tyre industry has been depending largely on imports to meet its requirement despite the recent 10% hike in import duty. The industry was buying a portion of its requirement from the domestic market too, but the shortage of carbon black has made it go slow on purchases. “The low prices would severely affect production,’’ said John.

The had forecast that output would touch eight lakh tonnes this year. However, growers and traders estimate that the production could be around seven lakh tonnes, up from 6.91 lakh tonnes in 2016-17.

  • India Times

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