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By Rahul Dhuri
MUMBAI – The December contract of rubber on Indian Commodity Exchange hit a three-month low of 12,112 rupees per 100 kg today, tracking weakness in benchmark contracts on Tokyo Commodity Exchange and a fall in prices of natural rubber in key spot markets of Kerala, analysts said.
On ICEX, the December contract ended at 12,160 rupees per 100 kg, down 1.2% from Friday.
The most active April contract of rubber on TOCOM hit a two-year low of 157.80 yen (101.03 rupees) per kg today, tracking a fall in prices on the Shanghai Futures Exchange, analysts said.
Worry about a slowdown in China’s economy and expectations of higher global production further weighed on prices. China is the major consumer of natural rubber.
According to Association of Natural Rubber Producing Countries, global natural rubber production in Jan-Sep rose 1.5% on year to 9.78 mln tn, and is anticipated to grow 5.8% to 14.6 mln tn in 2019.
However, the April contract on the Japanese bourse ended up 0.6% at 159.6 yen per kg, tracking gains in crude oil contracts on the New York Mercantile Exchange, and due to a weak yean against the dollar.
Rubber prices take cues from crude oil, as the latter is used to produce synthetic rubber, a substitute for natural rubber.
In Thailand, the price of RSS-3 grade rubber was down 75 cents at $136.23 per 100 kg, while in Malaysia, the SMR-20 grade was down $2.40 at $122.8 per 100 kg, according to data released by Rubber Board of India.
In the key spot markets of Kerala, rubber prices fell owing to subdued demand from domestic stockists and tyremanufacturers, said John Joseph, a rubber trader.
Expectations of a rise in arrivals in the coming days are also seen weighing on rubber prices, Joseph added.
The widely-traded RSS-4 variety of rubber was sold in the range of 121-123 rupees per kg, down 1 rupee from Saturday, traders said.
According to Rubber Board data, the price of the RSS-4 variety was at 123.00 rupees per kg in both Kochi and Kottayam, down 0.50 rupee.
Today’s closing prices of rubber, in rupees per kg, at Kottayam and Kochi, as detailed by the Rubber Board, and the change in prices, in rupees, compared with the previous close are given in the following table:
| KOTTAYAM | KOCHI | |||
| GRADE | PRICE | CHANGE | PRICE | CHANGE |
| RSS-4 | 123.00 | (-) 0.50 | 123.00 | (-) 0.50 |
| RSS-5 | 118.00 | (-) 0.50 | 118.00 | (-) 0.50 |
| ISNR-20 | 112.50 | (-) 0.50 | NA | NA |
| Latex | 83.50 | Unch | NA | NA |
OUTLOOK
Subdued demand from domestic stockists and weakness in benchmark contracts on TOCOM are likely to exert pressure on prices of natural rubber in the key spot markets of Kerala in the coming days, traders said. End
US$1 = 72.89 rupees
Edited by Avishek Dutta
