Kochi April 6
Rubber production slipped 3.8 per cent during 2009-10 even as consumption surged. The industry is, however, relieved that the earlier deficit of over eight per cent in production has been partly made up during the lean wintering months. The very attractive prices in the market have resulted in extensive tapping even in the adverse weather situation, sources in the Rubber Board said.
Despite the fall in overall deficit during recent months, prices are likely to remain firm in the short to medium term, said Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association. The prices are unlikely to rise further unless it is driven by global price surge or excessive speculative activity in the domestic market, he added.
Global trends
Global price trends were dictated by China, India and Malaysia which together account for more than 45 per cent of the global consumption of natural rubber. While these three are major consuming countries in the region, China and India are considered the pace setters of global demand and price trends.
During the first two months of the current year, import by China surged 63 per cent for natural rubber and 118 per cent for compound rubber. In Malaysia, import of natural rubber rose 34 per cent. During the same period, India posted a 17 per cent growth in consumption of natural rubber and over 100 per cent growth in imports.
The high production in India which was evident during the last couple of months continued in March with production growing to 50,650 tonnes from 48,300 tonnes last year. Meanwhile, fuelled by the growing installed capacity in the tyre industry, rubber consumption for the month grew to 79,500 tonnes (74,200 tonnes). The Automotive Tyre Manufacturers Association has pointed out that the capacity in the tyre sector is poised to more than double in the year ahead and consumption will maintain its brisk pace.
Demand-supply gap
Provisional figures for 2009-10 show that production fell to 8,31,400 tonnes (8,64,500 tonnes). Meanwhile, consumption for the year accelerated 6.8 per cent to 9,30,565 tonnes (8,71,720 tonnes). The demand-supply gap has been met through surging imports.
Imports for March were up by over 50 per cent at 10,136 tonnes. But demand-supply deficit was more manifest in the imports for the year as a whole. Imports during 2009-10 were up 119 per cent at 1,70,048 tonnes (77,762 tonnes). The high level of imports was mainly on account of production shortfalls.
Although exports have more than doubled in March, overall export performance for the year as a whole has been lower. Exports fell by close to 50 per cent 23,764 tonnes (46,926 tonnes). Rubber stock continued to be the silver lining for industry. Stocks stood at 2,48,000 tonnes against 1,96,230 tonnes last year.
Spot rubber rules firm
Kottayam, April 6
Spot rubber closed unchanged on Tuesday. According to analysts, the market lost its direction as the domestic futures turned weak possibly on profit booking as it lacked follow-up buying at higher levels. Sustained summer rains seemed to be putting pressure on buyers and most of them were hesitant to expand their commitments. Sheet rubber closed firm at Rs 160 amidst scattered transactions.
Futures weak
The April futures weakened to Rs 158.75 (160.12), May to Rs 161.85 (163.86), June to Rs 163.75 (165.81) and July to Rs 162.61 (164.60) a kg for RSS 4 on the National Multi Commodity Exchange. The April futures for RSS 3 closed up at ¥353 (¥346.5), May at ¥348.1 (¥349.9), June at ¥346 (¥347.2) and July at ¥333.4 (¥332.9 a kg during the day session on Tokyo Commodity Exchange. RSS 3 improved to Rs 159.97 (159.29) a kg on Singapore Commodity Exchange (SICOM).
Spot prices were (Rs/kg): RSS-4: 160 (160); RSS-5: 158 (158); ungraded: 156 (156); ISNR 20: 157 (157) and latex 60 per cent: 101 (101).
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