[Geofin Comtrade] Daily report on Natural Rubber: February 24, 2015

MARKET COMMENTARY

Sentiments were muddled in the local natural rubber market on Monday. Limited arrivals kept the prices firm in the spot market while on NMCE, RSS4 edged lower. Declines seen in the major international natural rubber market along with low demand from the tyre sector weighed on. In the overseas market, meanwhile, the commodity is seen stretching losses on Tuesday. TOCOM rubber futures inched lower, shedding more than one per cent, tracking losses in crude oil. Also, investors probably turned cautious ahead of the US Federal Reserve Chair Janet Yellen testimony and as China holidays draws to a close. SHFE is to reopen tomorrow, 25th February after a weeklong Lunar New Year holiday.

MARKET NEWS

⊳TOCOM February rubber futures expired on Monday with 272lots being delivered compared to 335 lots in the previous month.

⊳National Multi Commodity Exchange of India plans to launch 23 auction-based forwards contracts in farm commodities in two phases starting this month. Auction bases forwards contracts in rubber, castor seed and mustard will be launched in February.

⊳ITRC and IRCo will have a meeting with Cambodia, Lao DPR, Myanmar and Vietnam on 26 February 2015 in Bandung, Indonesia. The main objective of the meeting is to consider how the seven NR producing countries could work together in order to manage NR production and marketing in the future.

⊳Kerala Chief Minister OommenChandy has said that the government will consider direct procurement of rubber as the benefits of the rubber package announced by the government are being cornered by middlemen.

⊳Thailand’s government will begin a second round of rubber buying from the market through a 6 billion baht ($184.22 million) buffer fund, the country’s farm minister said.

⊳Media report says India likely to raise import duty on natural rubber to 30 per cent from 20 per cent to protest the domestic growers from cheap imports and check further decline in prices. The hike may to be announced in the next Union Budget.

⊳The National Council for Peace and Order (NCPO) and the government will instruct the Government Savings Bank and Krung Thai Bank to provide business operators with soft loans worth 25 billion baht ($768 million) to buy natural rubber from farmers, the Bangkok Post reported, quoting Deputy Prime Minister and Defence Minister PrawitWongsuwon.

TECHNICAL COMMENTRY

RUBBER Mar NMCE

As long as support at 12500-12450 ranges holds downside, mild pullback seems possible. However, slippage past the same with volumes could see an extension to the present down moves to 12200 below which weakness is likely to intensify. Alternatively, a direct rise above 12650 may see prices revisiting the recent highs or more.

Source: Geofin Comtrade