Spot rubber firm on supply concerns

Spot rubber firm on supply concerns

Kottayam, May 26

Physical rubber prices turned better on Wednesday. The market reacted in tandem with the smart gains in domestic futures on NMCE as sellers stayed back anticipating a positive trend during the days ahead. Sheet rubber increased to Rs 170 (168) on fresh buying and short covering. According to sources, the tyre sector was inactive and the prices ruled firm mainly on supply concerns.

Futures recover

The June futures for RSS 4 bounced back to Rs 168.81 (164.69), July to Rs 168 (164), August to Rs 160.11 (156.04) and September to Rs 155.10 (153.75) a kg on National Multi Commodity Exchange.

RSS 3 improved at its June futures to ¥363 (¥357.9), July to ¥341.1 (¥332.1), August to ¥308.3 (¥296.2), September to ¥283.8 (¥277.1) and October to ¥275.9 (¥271) while the November futures finished its debut trading at ¥273.7 a kg during the day session on Tokyo Commodity Exchange.

The June futures closed at ¥361.6, July at ¥344, August at ¥311.1, September at ¥387.5, October at ¥277.8 and November at ¥275 a kg during the night session.

RSS 3 firmed up further to Rs 180.12 (177.70) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 170 (168); RSS-5: 167.50 (166); ungraded: 165 (163); ISNR 20: 151 (149) and latex 60 per cent: 110 (106).


Court asks Govt to address woes of rubber users

New Delhi, May 22

The Delhi High Court has directed the Union Government and Commerce Ministry to look into the representations made by the rubber user industry on the high price of natural rubber and the inverted duty structure within eight weeks.

The three user-industry associations — Automotive Tyre Manufacturers' Association, Indian Cycle and Rickshaw Tyre Manufacturers' Association and All-India Rubber industries Association – had approached the court through separate petitions after their representations were rejected by the Commerce Ministry. They asked for fixing maximum and minimum price for natural rubber, reduction in Customs duty on natural rubber from 20 per cent to 7.5 per cent and a ban on its futures to avoid speculative trading.

“This court directs the Union of India and Ministry of Commerce to consider the representations including the present petition … within a period of eight weeks. Ideally, the Secretary, Ministry of Commerce should constitute a panel comprising experts from the Rubber Board,” said the Delhi High Court verdict.

It added that “a reasoned order containing the decision of the Government will be passed within a period of four weeks thereafter,” which would have to be communicated to the petitioners within a period of two weeks. The Court has also left an option for the petitioners to come back to it for further remedy, in case the decision of the Commerce Ministry is unsatisfactory.

Speaking to Business Line, a user industry official said: “We want the import duty to be fixed beyond a certain point. If natural rubber is at Rs 80 a kg, the duty would be at Rs 16 a kg (20 per cent customs) and Rs 16 a kg duty should be the ceiling, even if natural rubber prices go up. Even though we have made several representations, we have not received a reasoned justification so far. We want the interests of the users also to be taken care of, like it had been done for cotton.”


With the exponential growth of the auto industry, the rising demand for tyres versus a much smaller growth in the production of natural rubber has led to the sharp increase in pricing. According to Rubber Board data, average monthly natural rubber (RSS 4) prices have gone up to Rs 149.48 a kg in March this year, from Rs 137.72 a kg in January. It had then touched a high of Rs 167.92 a kg on April 24 – 22 per cent higher than January average prices – before falling to Rs 165.30 a kg by May 1. The price on May 21, 2010 was Rs 165 a kg, 67 per cent higher compared with the same period a year ago.