Rubber output up 6% in January-expected to drop in Feb,March

Rubber output up 6% in January
Production expected to drop in Feb, March.
Kochi, Feb. 4
Domestic rubber production increased six per cent in January. However, the Rubber Board officials said that the primary reason for the rise last month was due to a lower base as production in January 2009 was far lower, mainly due to adverse weather conditions. Rubber output for January this year was 97,500 tonnes (91,900 tonnes).
Production in February and March is expected to drop as most of the rubber trees shed their leaves and tapping operations come to a halt. Evey year, January is the month when rubber stocks are at their highest levels, and they begin to dip in the succeeding months as consumption overtakes production. Consumption of rubber was lower than production in January this year as well.
Consumption in January was 79,500 tonnes that resulted in an addition of 18,000 tonnes to the country's inventories. Production for the first 10 months of the current fiscal was down five per cent at 7,29,250 tonnes.
Meanwhile, consumption for the first 10 months was up 6.6 per cent at 7,73,815 tonnes, leaving a deficit which has been bridged by imports.
Imports
Rubber imports were up 114 per cent at 1,46,653 tonnes till January. Imports in January were 6,553 tonnes. As the domestic demand continued to outstrip supply, exports plunged 69.8 per cent to 12,912 tonnes during April-January period. Exports during January stood at 2,480 tonnes. Although rubber stocks stood at 2.8 lakh tonnes, they are bound to be eroded from their current high levels as the lean season has begun.
Target
Prices are also expected to rule firm as arrivals start declining. However, they are not expected to be capped as adequate stocks have been built for the coming months. Going by the trends so far, the country is not expected to reach the revised production target of 8.4 lakh tonnes set for the fiscal.
Rubber production target for 2009-10 was 8.67 lakh tonnes. In view of the adverse weather conditions and production shortfalls, the target was scaled down.

Spot rubber rules firm
Kottayam, Feb. 4
Physical rubber prices showed a firm trend on Thursday. Though the domestic futures were in a bearish mood with widespread losses in all contracts, most of the grades in spot finished higher on supply concerns. The only exception was sheet rubber which finished flat at Rs 135 on buyer resistance. Major players seemed to be expecting better prices in the days ahead though a mixed mood in international markets failed to give a definite direction.
Futures decline
The February futures declined to Rs 134.40 (136.12), March to Rs 137.01 (139.13), April to Rs 141.03 (143.16) and May to Rs 144.10 (145.99) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE). RSS 3 finished in the green at Rs 141.36 (141) a kg on Singapore Commodity Exchange (SICOM). It moved down to Rs 142.06 (142.31) a kg at Bangkok. The February futures for RSS 3 improved to ¥273 (¥272.5) (Rs 139.18), and March to ¥273.5 (¥271.9) while the April futures slipped to ¥275.5 (¥276) and May to ¥278 (¥279.1 a kg during the day session on Tokyo Commodity Exchange. Spot rates were (Rs/kg): RSS-4: 135 (135); RSS-5: 132 (131.50); ungraded: 130 (129); ISNR 20: 131.50 (130.50) and latex 60 per cent: 89.50 (89.50).

‘Rubber price will not come down’
Staff Reporter
KOCHI: The Indian Rubber Manufacturers’ Federation has said that move by tyre manufacturers and other rubber-based industries to push down the price of natural rubber will not succeed.
In a statement issued here, Chairman of the federation K. T. Mathew claimed that world demand for rubber had grown 25 per cent while production had come down 20 per cent during the current calendar year.
The statement also claimed that demand for natural rubber had gone up as automotive industry grew 30 to 60 per cent in different countries. Hence there has been an increase in demand for high quality tyres.
Decision to reduce the use of plastic and synthetic rubber on the basis of studies of climate change had also favoured natural rubber, the statement claimed.
Import of around 1,60,000 tonne of rubber last year had resulted in a rise in demand for natural rubber in Thailand and Indonesia, the statement said. The statement also warned that a shortage of rubber tappers too can add to the shortage of production and this in turn may further push up the prices.