MARKET COMMENTARY
⊳ Sharp declines witnessed in the overseas market dampened the sentiments further in the Indian markets on Tuesday. RSS4 in the physical market slipped to its weakest level since December 2009. Latex (drc60%) prices dropped as well. Apprehensions that the supply glut may swell further following Thailand government’s approval to sell-off rubber from the state stockpiles depressed the prices.
⊳ In the overseas market on Wednesday, natural rubber prices are seen on a greener turf probably bolstered by reports that Thailand was has delayed the move to sell the rubber stocks. TOCOM rubber futures are seen rising after the previous session declines. Weaker yen and upbeat economic indicators from the US improved the sentiments too.
MARKET NEWS
⊳ Thailand’s National Council for Peace and Order is likely to delay the sale of 210,000 tonnes of rubber in state-owned stockpiles, caving in to rubber farmers who feared selling the stocks in one go would drive down prices.
⊳ Thailand’s National Council for Peace and Order has approved a budget of 5.94 billion baht for the overhaul of the rubber industry. The measures involve maintaining a stock to stabilise prices, improving planters’ liquidity, developing the rubber market and conducting research and development on rubber products.
⊳ Indonesian natural rubber production likely to miss target owing to prolonged wintering in certain rubber growing area in the country. According to Rubber Association of Indonesia, production may be 6.0% less than the target of 3.2 million tonnes.
⊳ Vietnam will eliminate rubber export tax Oct. 2 according to Vietnam Rubber Association citing circular issued Aug. 18 by finance ministry.
⊳ The global surplus of natural rubber will shrink 46 percent in 2015 as demand expands and farmers reduce tapping because of decreasing prices, according to the International Rubber Study Group.
⊳ Thailand plans to reduce plantation area by 100,000 rai (16,000 hectares) a year for 7 years.
TECHNICAL VIEW
RUBBER Sep NMCE
Despite breaching lower level of the consolidation range of 13000- 12700, prices were held near 12650 in the previous session. Looking ahead, while mild pullbacks to 12850-12900 ranges cannot be ruled out, it is mandatory to sustain above 13050 to induce some buying. Else, it may again succumb to higher level selling.
TURNAROUND
| Resistances | LEVELS | Supports |
| 12850-12900 | 13050-12700 | 12650/12500 |
| 13050/13150 | 12400/12200 | |
| 13280/13350 | 12000 |
Source: Geojit Comtrade
Download this report (full content – PDF file) here
