MARKET COMMENTARY
Trend in the local as well as in the major international natural rubber market continues to be under the strong influence of bears. In the Indian market last week, RSS4 slipped to its weakest level since early December 2009. Subdued demand and bearish trend in the overseas market continued to pressurize prices to move south despite occasional disruptions in tapping due to heavy monsoon rains in the major rubber growing areas in Kerala. In the meantime, on Monday, the commodity is seen stretching monthly losses in the international market. TOCOM rubber futures resumed to decline following an initial rise on concerns over demand from China. Lacklusture manufacturing data from China weighed on overall market sentiments amidst uncertainty over the sale of rubber stocks by Thailand.
MARKET NEWS
⊳ Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 3.9 percent to 163706 tonnes last week.
⊳ 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.
TECHNICAL VIEW
RUBBER Sep NMCE
Unsuccessful attempts to break above 12850 are likely to meet with higher level selling and such moves extending beyond 12400 ranges may strengthen bearishness further.
TURNAROUND
| Resistances | LEVELS | Supports |
| 12750/12850 | 13050-12850-12650 | 12600/12500 |
| 12900/13050 | 12400/12200 | |
| 13150/13280 | 12000 |
Source: Geojit Comtrade
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