KOCHI,INDIA(Commodity Online): The recent upturn in India rubber prices, prompted by global glut reduction activities, is unlikely to sustain, according to industry sources. The natural rubber prices surged 4% this month.
The rise witnessed in international markets was mainly as a result of the announcements made in to reduce surplus stocks. Thailand, the largest producer of rubber in the world, has announced subsidies for rubber farmers and proposed to buy rubber from the market. This led to a rise in global prices that had fallen to Rs 97 per kg. The Bangkok price touched Rs 105.42 per kg on Monday.
But there has been no increase in demand, particularly from China, the largest consumer. So it is hard to say whether the uptrend will be continued without a surge in demand, according to experts.
Futures prices on Tokyo Commodity Exchange showed a correction during the past week after a long period of fall. Indian rubber prices too have risen about 4% in the past one month to reach Rs 126 per kg.
Another reason might be the the Kerala government’s decision to procure rubber at Rs 5 more than the market prices.The futures in NMCE are also not showing a bullish trend.
The upturn in prices has not bring back cheers to the farmers as tapping is not going on in full swing though it is peak season in Kerala. Chief Minister of the south Indian state Kerala recently urged the central government to ban imports of Rubber. Oommen Chandy, Kerala Chief Minister, met Prime Minister Narendra Modi to discuss the rubber crisis.
Kerala has demanded duty hike on sheet rubber and rubber products from the current 8 per cent to 40 per cent to curb the import of huge quantities of non-tyre finished products from China which damages the prospects of domestic small-scale rubber industries.
Spot rubber was mixed on Monday. The most active counter RSS 4 opened steady but pared initial gains, possibly following a weak closing on the National Multi Commodity Exchange.
– Commodity Online
