MARKET COMMENTARY
⊳Sharp upsides were witnessed in the local natural rubber market last week after the tyre companies agreed to purchase rubber locally in a meeting convened by the Kerala State government. Sentiments were upbeat following the decision, lifting RSS4 to a seven week high on NMCE. Spot prices gained as well. Gains in the overseas market lend support too. However, investors/trades are probably waiting for more clarity on the new formula approves the government.
⊳ As the week’s session commences, positive moves are being witnessed in international natural rubber market. TOCOM rubber futures gained more than one per cent bolstered by advances in crude oil prices and weakening yen. SHFE and AFET rubber futures inched up as well.
MARKET NEWS
⊳The Kerala government today approved a formula to help rubber farmers after holding discussions with 12 tyre manufacturing companies in the country. As per the formula, companies would purchase natural rubber at a price fixed by Rubber Board considering the international price of natural rubber plus 20 per cent customs duty and five per cent purchase tax.
⊳Natural rubber production in India in November declined 25 per cent on year on year basis to 64000 tonnes while consumption and imports rose 12 per cent and 19 per cent to 85000 tonnes and 33156 tonnes respectively.
⊳China to raise the cap for rubber import tariff to 1500yuan a tonne from the present 1200 yuan a tonne with effect from January 01.
⊳Indian Rubber Growers Association has urged an urgent intervention of the state and the central government to initiate steps to save rubber growers. In the mean time, the growers association comprising UPASI, APK, IRGA etc have filed a petition under the Provisions of Safeguard before the Directorate of Safeguards, New Delhi to protect the domestic rubber growers from un-controlled and unrestricted imports.
⊳Kerala State Finance Minister in a letter to the Union Commerce Minister has sought Rs.1000 crore from the Center’s Price Stabilization Fund to provide relief to the rubber growers.
⊳Malaysian Plantation Industries and Commodities Minister says Malaysia, Indonesia and Thailand are doing what it takes to ensure production does not exceed current world demand for rubber and urged ANRPC members to hold a ministerial level meeting.
⊳Thai government and at least 7 exporting companies plan to form fund worth more than 400m baht to buy rubber on Agricultural Futures Exchange of Thailand according to PongsakKerdvongbundit, managing director of Von Bundit.
TECHNICAL COMMENTRY
RUBBER Jan NMCE
Prices were held near the falling trend line resistance of 12290 and a voluminous break over the same will see buying continuing initially to 12500. However, inability to sustain the same could call for a corrective dip to 11900/11750. Slippage past 11500 will again induce weakness.
Source: Geofin Comtrade
