Rubber prices undergoing technical correction

Rubber prices undergoing technical correction
Kottayam: Rubber prices are undergoing a technical correction mainly due to the initiatives taken by the US. It intends to impose strict controls on institutions that incur loss in their transactions. This has prompted the international funds to make profit and then disappear from the scene.

The main reason for the price hike is the sluggishness in global rubber production and the surging demand. Following the announcement by International Tripartite Rubber Council (ITRC) at its meeting Kuala Lumpur that in the near future rubber production could not be increased, the TOCOM futures shot up to ¥305.5 a kg. Of the total global production, 76 per cent comes from Thailand, Malaysia and Indonesia that are members of ITRC. With the decision of Vietnam to joint

he council, ITRC will control 84 per cent of the rubber production. Considering the increase in demand and the non availability of the commodity, the manufacturers might demand for an import of 2 lakh tonnes, it is reported. Since the price of rubber is ruling high in the international market, anyimport will adversely affect the industries. In 2009, the import was around 1.5 lakh tonnes. The fluctuation in crude prices is the major factor which influences the rubber. The beginning of February is the Lunar New Year. The Chinese dealers are expected to withdraw this time. It will be a volatile phase in the market. This will continue till the Chinese dealers return to the market. After remarkable gains, the situation is quite congenial for a technical correction. While basically rubber is strong, profit booking may not create situations for big falls in the market. It is likely that the buyers would be more active by the middle of February. (BL)