Demand-supply gap in rubber likely to stretch further

Demand-supply gap in rubber likely to stretch further
Kochi: Given the handsome returns as the price of natural rubber continues to hover over Rs 100 a kg, farmers are unwilling to cut down their low-yielding aged rubber trees and re-plant them with new high-yielding clones.

Rubber prices end flat
Kottayam: The physical rubber prices finished almost unchanged on Friday. According to observers, the market was rather calm with a decline in volumes during the session.

The domestic and international futures were mostly range-bound with minor variations and hence the sentiments failed to strengthen as expected. Sheet rubber was flat at Rs 110.50 a kg amidst scattered transactions.

Meanwhile, ISNR 20 gained further on fresh enquiries from the non-tyre sector. The trend continued to be mixed.

The November futures firmed up to Rs 112.10 (Rs 111.20), December to Rs 113.75 (Rs 113.00), January to Rs 115.81 (Rs 115.02) and February to Rs 117.55 (Rs 116.69) a kg for RSS 4 on National Multi Commodity Exchange (NMCE). RSS 3 (spot) firmed up marginally to Rs 116.80 (Rs 116.27) a kg at Bangkok.

The grade closed at Rs 118.52 (Rs 117.60) a kg on Singapore Commodity Exchange (SICOM). The November futures improved to ¥233.9 (¥233.5) (which is Rs120.69), while the December futures slipped to ¥234.3 (¥234.4), January to ¥231.8 (¥232.7), February to ¥232.6 (¥234.3), March to ¥233.7 (¥235.3) and April to ¥235.2 (¥237.3) a kg for RSS 3 during the day session on Tokyo Commodity Exchange. The November futures moved up to ¥234.7, December to ¥234.7, January to ¥233.3, February to ¥234.2, March to ¥235.8 and April to ¥237.6 a kg. (BL)
http://www.thehindubusinessline.com/2009/11/14/stories/2009111450631300.htm


“The yields from aged trees might be falling but the farmer is unwilling to undertake re-planting since the returns continue to be quite handsome and there is a time lag of seven years before the new plants begin to yield – a period of all expenditure and no returns,” Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association, said.



Output falls

While natural rubber output fell by 9.5 per cent to 4,35,125 tonnes during the first seven months of the current fiscal, consumption has edged up three per cent to 5,36,100 tonnes. The demand-supply mismatch in the country, which had been relatively self-sufficient for the past two decades, has already crossed one lakh tonnes during the April-September period. And the situation is likely to deteriorate in the times ahead, sources in the industry warned.



As fewer areas have been coming under rubber plantations and the areas under aged trees have been growing, the demand-supply mismatch is set to widen to 4-5 lakh tonnes by 2014-15, Mr Radhakrishnan said. While supply is likely to stagnate at around 8.5-9 lakh tonnes, demand is expected to spurt to 13.5-14 lakh tonnes. (BL)

http://www.thehindubusinessline.com/2009/11/14/stories/2009111450751300.htm