Natural rubber market in India improved slightly during the week 10/14 March 2014. Sheet rubber RSS 4 edged up from Rs.146.50 to Rs.148.00 a kg, while block rubber ISNR 20 inched up from Rs.143.00 to Rs.144.00 a kg. At the same time latex 60% dropped from Rs.113.65 to Rs.111.55 a kg. While the slight rise in dry rubber grades was on commencement of support procurement by co-operative organisations, latex declined as its demand was quite modest and it was not included in the price support procurement. The procurement is yet to gain momentum as the offer rate is well below the expectations of the rubber producers.
Demand from the major rubber manufacturing sector continued to be in low key during the week. Buyers from the tyre sector were content with modest purchase from the domestic market while some of them bought from overseas 18,141 tonnes of NR during February 2014. This just filled the gap between production and consumption. While NR production during the month was around 60,000 tonnes, its consumption was 78,000 tonnes, according to the Rubber Board’s figures. Export of the commodity was a mere 8 tonnes during the month, mainly since the price abroad was lower to the price prevailing in India for comparable grades. The Indian grade RSS 4 was traded around Rs.148 a kg during the week, whereas the comparable grade RSS 3 fetched around Rs.140 a kg in the Bangkok market. The largely imported block rubber SIR 20 of Indonesian origin was available around Rs.118 a kg while the Malaysian grade SMR 20 was traded around Rs.120 a kg in the Kuala Lumpur market. These price levels dimmed the prospects of export.
Overseas developments
World demand for NR has been projected at 11.94 million tonnes in 2014 following positive growth outlook of major economies. The World Bank has projected the global economy to grow 3.2% in 2014. The US growth may accelerate to 2.8 percent and the positive signals in the Euro zone may culminate in 1.1% growth in 2014 against negative growth last year. In the Asian continent, China’s growth has been estimated at 7.7%, India’s 5.6% from 4.7% in 2013 and Japan’s by 1.4% in 2014. These positive outlooks coupled with the supply crunch in NR brought about by the ongoing wintering season in major rubber producing countries Thailand, Indonesia and Malaysia should provide a boost to the NR market.
There are already signals that the NR market in Southeast Asia has started to pick up. Sheet rubber RSS 3 moved up from $ 2.2 to $ 2.3 a kg in the week 10/14 March 2014. In Malaysia block rubber SMR 20 improved slightly from $ 1.88 to @ 1.97 a kg and latex 60% from 1.49 to $ 1.97 a kg. There was price rise in futures trade also. Quotations at the Tokyo Commodity Exchange moved up from 227 to 244 yen a kg for RSS 3 during the week. Chinese futures also moved forward, the most active contract at the Shanghai futures exchange rose during the week to 15,765 yuan ($2,600) per tonne for September delivery, against 15,195 yuan ($2,500) per tonne settled last week for the same month delivery.
Source: rubberasia.com
