Spot rubber turns weak on global cues
Aravindan
Kottayam, June 29
Spot rubber prices turned weak on Tuesday. In the spot market, the prices slipped following declines in the domestic and international futures. Sheet rubber moved down to Rs 179.25 from Rs 180 a kg mainly on profit booking at higher levels. The volumes were comparatively better.
There is a close link between the prices of oil and rubber. When the oil price surges ahead in the international market it is natural that upswings are visible in rubber prices also. Therefore the price hike in rubber cannot be interpreted as abnormal or too much in the present context, Advocate Mr Joy Nadukkara, Ex MP and President, Meenachil Rubber Marketing and Processing Cooperative Society Ltd told Business Line.
Futures decline
In futures, the July series weakened to Rs 178.30 (180.75), August to Rs 172.10 (173.73), September to Rs 165.21 (166.69) and October to Rs 161 (162.63) a kg for RSS 4 on the National Multi Commodity Exchange. On the Tokyo Commodity Exchange, the July futures declined sharply to ¥348.4\Rs 182.52 (¥367.1), August to ¥321.8 (¥340.2), September to ¥305.6 (¥321.3), October to ¥286.3 (¥300.2), November to ¥277.7 (¥289.5) and December to ¥274.4 (¥283.8) a kg for RSS 3 during the day session. RSS 3 (spot) weakened to Rs 168.76 (170.95) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 179.25 (180); RSS-5: 177 (178); ungraded: 174 (176); ISNR 20: 157 (158) and latex 60 per cent: 127 (127).
Wednesday, June 30, 2010
Tuesday, June 29, 2010
Global rubber consumption may rise 12%
Global rubber consumption may rise 12%
Posted: 28 Jun 2010 09:37 PM PDT
More demand, low supply may push prices to Rs 200 a kg from Rs 180 now.
Despite an estimated 6.2 per cent growth in global supply this year, the natural rubber (NR) market is poised for a strong bull run. The price of benchmark grade RSS-4 on Monday touched an all-time high of Rs 180 a kg. Both growers and traders here anticipate further rise in prices. They expect the price to touch Rs 200 a kg soon.
According to the latest consumption trend, global consumption may rise 11-12 per cent by the end of the year. There has been a huge fall in consumption in the West, especially the US. But, all leading Asian economies are consuming more rubber.
GAINING STRENGTH
Rubber production (in tonnes)
Country 2009 2010* % change
Thailand 3,164,000 3,240,000 2.40
Indonesia 2,440,000 2,592,000 6.20
Malaysia 857,000 1,000,000 16.70
India 820,000 895,000 9.10
Vietnam 724,000 770,000 6.40
China 646,000 680,000 5.30
Sri Lanka 137,000 142,000 3.70
Cambodia 34,000 49,000 43.90
Total 8,822,000 9,369,000 6.20
*estimated
According to latest estimates of the Association of Natural Rubber Producing Countries (ANRPC), the supply from the ANRPC region may rise 6.2 per cent this year after three consecutive years of stagnation or decline.
The estimated output for the current year is 9.37 million tonnes. The output growth in 2007, 2008 and 2009 was 0.2 per cent, nil and -3.6 per cent, respectively.
Sibi Monippally, general secretary, Indian Rubber Growers Association (IRGA), said it was unlikely that prices would decline as south-east Asian nations were increasing their inventories. The market was likely to be in a strong bull phase, he said.
Preliminary estimates from ANRPC indicate the demand from China, India and Malaysia will be strong. This is mainly due to a buoyant automobile market in Asia’s economies. NR consumption rose in the first four months of this year by 25.5 per cent in China, 11.7 per cent in India and 13.6 per cent in Malaysia on an annualised basis. In China, which accounts for 32 per cent global demand, the imports of NR and NR-rich grades of compound rubber rose 17.3 per cent during the period. China’s consumption is estimated to rise 10.2 per cent in 2010 to 3.35 million tonnes.
In Malaysia, imports rose 30.4 per cent during January-April. The country is estimated to have imported 253,000 tonnes during the first four months of this year as against 194,000 tonnes in the same period last year.
In India, consumption increased to 316,000 tonnes in January-April as against 283,000 tonnes in the same period of 2009. According to Sajan Peter, chairman, Rubber Board, India was at the second spot in consumption, surpassing the US in 2009-10, clocking 6.8 per cent growth.
Consumption in the US dropped 34 per cent due to economic turmoil, he added. There will be a deficit of 85,000 tonnes in production over consumption in 2010-11 in the domestic market according to the board. But, Peter says, there will be no problem in availability in the local market as there is an opening stock of 248,457 tonnes.
The gap in consumption and production would widen not only in India but globally too. Rubber Board estimates show consumption will rise 6 per cent in 2010-11 while production will rise 9.1 per cent. However, industry sources do not agree with this.
According to them, consumption will increase more than 12 per cent in the current financial year. So, it is the supply-demand inequilibrium that determines prices the world over. The sharp increase in consumption and imports by China seem to be major factors behind the surge in prices.
During January-April, China imported 602,000 tonnes NR and 344,000 tonnes compound rubber, while imports were just 37,000 tonnes. So, the rate of increase in consumption in the ASEAN region, China and India would determine the future course in the rubber mart.
The increase in consumption in this region outperformed the drop in the EU and the US, said experts.
(business-standard.com)
Posted: 28 Jun 2010 09:37 PM PDT
More demand, low supply may push prices to Rs 200 a kg from Rs 180 now.
Despite an estimated 6.2 per cent growth in global supply this year, the natural rubber (NR) market is poised for a strong bull run. The price of benchmark grade RSS-4 on Monday touched an all-time high of Rs 180 a kg. Both growers and traders here anticipate further rise in prices. They expect the price to touch Rs 200 a kg soon.
According to the latest consumption trend, global consumption may rise 11-12 per cent by the end of the year. There has been a huge fall in consumption in the West, especially the US. But, all leading Asian economies are consuming more rubber.
GAINING STRENGTH
Rubber production (in tonnes)
Country 2009 2010* % change
Thailand 3,164,000 3,240,000 2.40
Indonesia 2,440,000 2,592,000 6.20
Malaysia 857,000 1,000,000 16.70
India 820,000 895,000 9.10
Vietnam 724,000 770,000 6.40
China 646,000 680,000 5.30
Sri Lanka 137,000 142,000 3.70
Cambodia 34,000 49,000 43.90
Total 8,822,000 9,369,000 6.20
*estimated
According to latest estimates of the Association of Natural Rubber Producing Countries (ANRPC), the supply from the ANRPC region may rise 6.2 per cent this year after three consecutive years of stagnation or decline.
The estimated output for the current year is 9.37 million tonnes. The output growth in 2007, 2008 and 2009 was 0.2 per cent, nil and -3.6 per cent, respectively.
Sibi Monippally, general secretary, Indian Rubber Growers Association (IRGA), said it was unlikely that prices would decline as south-east Asian nations were increasing their inventories. The market was likely to be in a strong bull phase, he said.
Preliminary estimates from ANRPC indicate the demand from China, India and Malaysia will be strong. This is mainly due to a buoyant automobile market in Asia’s economies. NR consumption rose in the first four months of this year by 25.5 per cent in China, 11.7 per cent in India and 13.6 per cent in Malaysia on an annualised basis. In China, which accounts for 32 per cent global demand, the imports of NR and NR-rich grades of compound rubber rose 17.3 per cent during the period. China’s consumption is estimated to rise 10.2 per cent in 2010 to 3.35 million tonnes.
In Malaysia, imports rose 30.4 per cent during January-April. The country is estimated to have imported 253,000 tonnes during the first four months of this year as against 194,000 tonnes in the same period last year.
In India, consumption increased to 316,000 tonnes in January-April as against 283,000 tonnes in the same period of 2009. According to Sajan Peter, chairman, Rubber Board, India was at the second spot in consumption, surpassing the US in 2009-10, clocking 6.8 per cent growth.
Consumption in the US dropped 34 per cent due to economic turmoil, he added. There will be a deficit of 85,000 tonnes in production over consumption in 2010-11 in the domestic market according to the board. But, Peter says, there will be no problem in availability in the local market as there is an opening stock of 248,457 tonnes.
The gap in consumption and production would widen not only in India but globally too. Rubber Board estimates show consumption will rise 6 per cent in 2010-11 while production will rise 9.1 per cent. However, industry sources do not agree with this.
According to them, consumption will increase more than 12 per cent in the current financial year. So, it is the supply-demand inequilibrium that determines prices the world over. The sharp increase in consumption and imports by China seem to be major factors behind the surge in prices.
During January-April, China imported 602,000 tonnes NR and 344,000 tonnes compound rubber, while imports were just 37,000 tonnes. So, the rate of increase in consumption in the ASEAN region, China and India would determine the future course in the rubber mart.
The increase in consumption in this region outperformed the drop in the EU and the US, said experts.
(business-standard.com)
Rubber prices flare up to Rs 180/kg on lower arrivals
Rubber prices flare up to Rs 180/kg on lower arrivals
Farmers withhold produce, rains affect tapping.
Stretching gains
Industry doesn’t find any evidence of the two lakh tonnes-plus buffer stock as stated by the Rubber Board.
Due to continuing inverted duty structure, imports are not a viable option.
Aravindan
C.J. Punnathara
Kottayam/Kochi, June 28
Sheet rubber prices for RSS 4 grade flared up to Rs 180 a kg on Monday on lower arrivals, partly on account of the rain arresting tapping operations and farmers withholding stocks. Despite the high prices and low arrivals, there was fair amount of buying from the market, mainly by the big tyre companies.
Mr Sajen Peter, Rubber Board Chairman, expressed his satisfaction over the rise in rubber prices. But he pointed out that the difference between the domestic and international price is Rs 10.
‘Harmful’
Further rise in rubber prices is not in anyway beneficial to the rubber industry and it appears to be unhealthy to the rubber sector as a whole, said Mr George Waly, President, Indian Rubber Dealers Federation at Kottayam.
“Rubber prices have been on a steep upward trajectory over the past few weeks and have touched a record high level of Rs 180 a kg. Industry is compelled to buy its most critical raw material at such unprecedented prices and absorb most of the hike, since the entire price hike cannot be passed on to the end consumers,” Mr Rajiv Budhraja, Director-General of the Automotive Tyre Manufacturers Association, said.
FRESH STOCKS
Of equal concern to the industry is the fact that most of the stocks in the market are fresh stock. Industry doesn’t find any evidence of the two lakh tonnes-plus buffer stock as stated by the Rubber Board. This further lends credence to the industry’s contention that the buffer stock is only on paper. At these prices points, rubber prices have even overshot international prices by Rs 6-8 a kg in case of sheet rubber and Rs 20-25 a kg in case of block rubber. However, due to continuing inverted duty structure, imports are not a viable option either, Mr Budhraja added.
Meanwhile, there were hardly any buyers for lower grade lots in the market and arrivals were virtually nil. The lower grades were most often bought by smaller companies mainly manufacturing cycle and rickshaw tubes that have totally gone off the market, Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association, said. Cycle and rickshaw tyre and tubes are highly price-elastic and consumers will not be willing to buy at the current high prices.
Also, there was relative convergence between rubber futures and spot prices. While the divergence between rubber futures and spot prices had flared up last month in anticipation of lower tapping and subdued arrivals in the market, that trend seems to be reversing at the moment, a trader in the futures market said.
Arrivals may rise
Besides, arrivals are expected to perk up in the coming months as the monsoon begins to wane and the productivity of the trees increases. There is also apprehension that with international prices lagging behind domestic prices, how far could the price surge be sustained in the market. But the growers are happy reaping windfall gains which they would not have believed possible six months ago.
Reports also indicate that there have been not been significant slowdown in tapping operations due to the monsoon. The intermittent nature of the rains and high prices have encouraged the farmer to continue with his tapping operations. Also, over 75 per cent of the rubber trees are rain guarded in order to pursue unhindered tapping operations even during the rainy season.
Spot rubber continued to explore record highs on Monday. The market opened with a gap after being closed for a hartal on Saturday and improved sharply on covering purchases to fill the gap between the domestic rubber futures on NMCE. Sheet rubber flared up to Rs 180 from Rs 177 a kg, gaining further strength from short supplies. Meanwhile, intensified rain was reported from the plantation areas and the market made all-round gains even amidst below-average volumes.
On the National Multi Commodity Exchange, the July series weakened to Rs180.51 (181.94), August to Rs 173.75 (174.53), September to Rs166.98 (167.93) and October to Rs 162.90 (164.54) a kg for RSS 4. On Tokyo Commodity Exchange, the July futures increased to ¥367.1 / Rs 189.66 (¥363.7), September to ¥321.3 (¥319.9), October to ¥300.2 (¥297.7) , November to ¥289.5 (284.7) and December to ¥283.8 (278.6) while the August futures closed flat at ¥340.2 (¥ 340.2) a kg for RSS 3 during the day session. The July futures slipped to ¥365 (Rs 188.54), August to ¥335.9, September to ¥319.5, October to ¥299 and November to ¥289 while the December futures closed steady at ¥283.8 a kg during the night session. RSS 3 (spot) firmed up to Rs 170.95 (169.98) a kg at Bangkok. Spot rubber prices (Rs/kg) follow: RSS-4: 180 (177); RSS-5: 178 (174); Ungraded: 176 (172); ISNR 20: 158 (156) and Latex 60 per cent: 127 (122).
Bouncing high on rubber
KG Kumar
As the price of natural rubber (RSS-4 grade) touched an all-time high of Rs.174 last week, Kerala's rubber planters are agog with the prospect of more gains.
From a low of around Rs 25 a kg almost ten years ago, the price of natural rubber has soared the past month, as has the price of latex, which now commands a price of around Rs 120 a kg, compared to Rs 100 a month ago.
The recent price spike has been triggered by lowered stockpiles in China – the largest consumer and the world's largest auto market – which, in turn, caused futures in Tokyo to climb to $3,231 a tonne.
Blame – or praise – the monsoon rains for this phenomenon.
As the heavy rains hamper rubber tapping – rainfall has also disrupted production in Thailand, the world's biggest producer and exporter – demand for rubber remains while supply stays tight.
And yes, rubber planters can still go to sleep tight under their blankets since prices are forecast to rise.
According to commodity analysts, soaring oil prices and increased domestic demand from automobile manufacturers will continue to push prices upwards.
Wherever you place the blame – futures trading or unregulated imports –.the trend, experts say, is for rubber to reach a level of Rs 200-220/kg in the next quarter.
Will this price level hold? Remember, rubber is essentially elastic – what goes up must ultimately come down.
According to the International Rubber Study Group (IRSG), global automobile manufacturers have scaled back production, cut jobs and closed factories due to declining demand, causing rubber futures to dip.
Rubber planters face a deadly combination – a worldwide economic slowdown, a deepening slump in the global automobile industry, and continuing low oil prices
As the fourth largest producer of natural rubber in the world, after Thailand, Indonesia and Malaysia, India, with a share of between eight and nine per cent of the world's production, ought to be chary.
All the other rubber-growing giants are striving to increase productivity, but Kerala's rubber planters are happy raking in the easy money. According to the Kerala State Planning Board's Economic Review, the Stateaccounts for 81 per cent of the area under rubber in the country.
The coverage under the crop in 2008-09 was 5.17 lakh ha, higher by 5430 ha. over the previous year.
But productivity, which was 1,903 kg/hectare per year in 2008, dropped to 1,796 kg in 2009.
Unless Kerala's rubber planters pull up their socks and tend to their plantations with the zeal displayed by their competitors in Thailand, Indonesia and Malaysia, they cannot expect to ride the price tiger for long.
Rubber Climbs to One-Month High as Supply in China Declines
Posted: 27 Jun 2010 11:44 PM PDT
By Aya Takada
June 28 (Bloomberg) -- Rubber advanced to a one-month high after data showed stockpiles in China, the largest consumer, declined to the lowest level in seven years.
Futures in Tokyo climbed to 288.6 yen per kilogram ($3,231 a metric ton), matching a high reached on May 28. The price gained 3.8 percent last week, booking the second weekly increase, as rainfall disrupted production in Thailand, the world’s biggest producer and exporter.
Natural rubber stockpiles monitored by the Shanghai Futures Exchange dropped 1,670 tons to 14,771 tons, the bourse said on June 25. It was the lowest level since January 2003, according to the Bloomberg data.
“Chinese buyers may have withheld rubber purchases amid speculation that the raw material prices would drop on a seasonal increase in production,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “As rubber prices have stayed high,” they may step up buying to replenish inventories, he added.
Rubber for December delivery rose to 284.1 yen at 10:44 a.m. local time from its settlement of 278.6 yen on June 25. It has become the most-actively traded contract on the Tokyo Commodity Exchange after its listing on June 25.
November-delivery rubber on the Shanghai Futures Exchange added 1.7 percent to 22,265 yuan ($3,278) a ton at 9:47 a.m. local time. Earlier, it rose to 22,355 yuan, the highest level since June 2.
China Demand
China, the largest auto market, is the biggest consumer of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
The benchmark price in Thailand added 0.8 percent to 118.85 baht ($3.67) a kilogram, supported by limited supply and growing auto demand in many countries, the Rubber Institute of Thailand said June 25. The group, which reviews the price once a day, issues new data in the afternoon.
Rubber prices may climb 26 percent next year as supplies lag behind demand, according to Royal Bank of Scotland Asia Securities (Singapore) Pte.
Natural rubber may average $4,500 a ton next year, up from $3,580 a ton year-to-date, as “heavy rainfall in southern Thailand has disrupted supply” and “inventory levels in China are worse than we expected,” Nirgunan Tiruchelvam, a commodities analyst at the bank, said in an e-mailed report last week.
(bloomberg.com)
Climate change hits rubber productivity: Sajen Peter, Chairman, Rubber Board
Posted: 27 Jun 2010 11:37 PM PDT
A commodity that has wide industrial use and is largely produced by one million small growers, rubber always makes headlines whenever there are price fluctuations. While growers try to maximise their returns from the crop, user industries try to minimise raw material costs. In the midst of these opposing pulls and pressures, the government is making crop-specific intervention through the Rubber Board and the latter has been effective in increasing the acreage under the crop. Sajen Peter, the chairman of the Board, who is completing his tenure this August, spoke to S Sanandakumar on a variety of topics ranging from supply and demand and the impact of climate changes.
Climatic changes and their impact on crop production, including rubber, is a hot topic these days. What are your views on this phenomenon?
It is an important area of inquiry as far as rubber is concerned. In fact, I was one of the first persons to raise the issue in 2007 at Brussels at the meeting of the Advisory Panel of International Rubber Study Group (IRSG). I said that the IRSG should study the phenomenon and even suggested that they join hands with the Association of Natural Rubber Producing Countries (ANRPC) for the study. We, at the Rubber Board, did a study using the data of the last fifty years and found that warm nights are increasing steadily. This has had an impact. The productivity of rubber trees in India which stood at 1,903 kg per hectare per year in 2008 was down to 1,796 kg per hectare per year in 2009. Climate change is a significant factor for this fall in productivity though other factors also might have contributed.
What is the global demand for rubber?
The western markets will take more time to come back to their earlier growth path. But this has been counter-balanced by the growth of eastern markets, especially India and China. In this context, let me remind you that the IRSG had anticipated that India will become the second largest consumer of rubber by 2015-2020 which happened last year because of the fall in the consumption in the US market by around 34%. It is difficult to retain this position. But the slow recovery in western markets might give India more time at the second slot.
Is production increasing?
Rubber cultivation is spreading. This year, the supply-demand gap is only 85,000 tonnes. However, we started with an opening stock of 2.40 lakh tonnes.
Is the area expansion in the North-East going as per plans?
Yes. Our Fifth Plan target was to increase the area by 25,000 hectares in the North-East. So far, we have nearly 13,700 hectares under rubber plantation but this data is incomplete as it does not reflect the planted area for which subsidy has not been given. If we add that figure, the actual achievement would be close to target.
Rubber trees are seen as an answer against global warming. Your comment.
Yes. The green canopy of rubber is seen as an answer for global warming. But I am against the conversion of forest land for rubber cultivation. Only in the case of the North-East where jhum cultivation is practised, we do suggest rubber as an alternative. Also, I am against the conversion of land meant for food crops for rubber. To discourage this practice, we even deny planting subsidy in such cases where farmlands meant for food production are used for rubber cultivation.
The user industry has approached the Delhi High Court on the issue of rubber price. What are your views on this?
The government has set up a committee to study this as per the court order. As chairman of Rubber Board, I will be heading that committee and I still have to study the issues. But the amended Rubber Act clearly says that the question of fixing a minimum and maximum price for rubber is a matter to be decided by the government.
(economictimes.indiatimes.com)
Farmers withhold produce, rains affect tapping.
Stretching gains
Industry doesn’t find any evidence of the two lakh tonnes-plus buffer stock as stated by the Rubber Board.
Due to continuing inverted duty structure, imports are not a viable option.
Aravindan
C.J. Punnathara
Kottayam/Kochi, June 28
Sheet rubber prices for RSS 4 grade flared up to Rs 180 a kg on Monday on lower arrivals, partly on account of the rain arresting tapping operations and farmers withholding stocks. Despite the high prices and low arrivals, there was fair amount of buying from the market, mainly by the big tyre companies.
Mr Sajen Peter, Rubber Board Chairman, expressed his satisfaction over the rise in rubber prices. But he pointed out that the difference between the domestic and international price is Rs 10.
‘Harmful’
Further rise in rubber prices is not in anyway beneficial to the rubber industry and it appears to be unhealthy to the rubber sector as a whole, said Mr George Waly, President, Indian Rubber Dealers Federation at Kottayam.
“Rubber prices have been on a steep upward trajectory over the past few weeks and have touched a record high level of Rs 180 a kg. Industry is compelled to buy its most critical raw material at such unprecedented prices and absorb most of the hike, since the entire price hike cannot be passed on to the end consumers,” Mr Rajiv Budhraja, Director-General of the Automotive Tyre Manufacturers Association, said.
FRESH STOCKS
Of equal concern to the industry is the fact that most of the stocks in the market are fresh stock. Industry doesn’t find any evidence of the two lakh tonnes-plus buffer stock as stated by the Rubber Board. This further lends credence to the industry’s contention that the buffer stock is only on paper. At these prices points, rubber prices have even overshot international prices by Rs 6-8 a kg in case of sheet rubber and Rs 20-25 a kg in case of block rubber. However, due to continuing inverted duty structure, imports are not a viable option either, Mr Budhraja added.
Meanwhile, there were hardly any buyers for lower grade lots in the market and arrivals were virtually nil. The lower grades were most often bought by smaller companies mainly manufacturing cycle and rickshaw tubes that have totally gone off the market, Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association, said. Cycle and rickshaw tyre and tubes are highly price-elastic and consumers will not be willing to buy at the current high prices.
Also, there was relative convergence between rubber futures and spot prices. While the divergence between rubber futures and spot prices had flared up last month in anticipation of lower tapping and subdued arrivals in the market, that trend seems to be reversing at the moment, a trader in the futures market said.
Arrivals may rise
Besides, arrivals are expected to perk up in the coming months as the monsoon begins to wane and the productivity of the trees increases. There is also apprehension that with international prices lagging behind domestic prices, how far could the price surge be sustained in the market. But the growers are happy reaping windfall gains which they would not have believed possible six months ago.
Reports also indicate that there have been not been significant slowdown in tapping operations due to the monsoon. The intermittent nature of the rains and high prices have encouraged the farmer to continue with his tapping operations. Also, over 75 per cent of the rubber trees are rain guarded in order to pursue unhindered tapping operations even during the rainy season.
Spot rubber continued to explore record highs on Monday. The market opened with a gap after being closed for a hartal on Saturday and improved sharply on covering purchases to fill the gap between the domestic rubber futures on NMCE. Sheet rubber flared up to Rs 180 from Rs 177 a kg, gaining further strength from short supplies. Meanwhile, intensified rain was reported from the plantation areas and the market made all-round gains even amidst below-average volumes.
On the National Multi Commodity Exchange, the July series weakened to Rs180.51 (181.94), August to Rs 173.75 (174.53), September to Rs166.98 (167.93) and October to Rs 162.90 (164.54) a kg for RSS 4. On Tokyo Commodity Exchange, the July futures increased to ¥367.1 / Rs 189.66 (¥363.7), September to ¥321.3 (¥319.9), October to ¥300.2 (¥297.7) , November to ¥289.5 (284.7) and December to ¥283.8 (278.6) while the August futures closed flat at ¥340.2 (¥ 340.2) a kg for RSS 3 during the day session. The July futures slipped to ¥365 (Rs 188.54), August to ¥335.9, September to ¥319.5, October to ¥299 and November to ¥289 while the December futures closed steady at ¥283.8 a kg during the night session. RSS 3 (spot) firmed up to Rs 170.95 (169.98) a kg at Bangkok. Spot rubber prices (Rs/kg) follow: RSS-4: 180 (177); RSS-5: 178 (174); Ungraded: 176 (172); ISNR 20: 158 (156) and Latex 60 per cent: 127 (122).
Bouncing high on rubber
KG Kumar
As the price of natural rubber (RSS-4 grade) touched an all-time high of Rs.174 last week, Kerala's rubber planters are agog with the prospect of more gains.
From a low of around Rs 25 a kg almost ten years ago, the price of natural rubber has soared the past month, as has the price of latex, which now commands a price of around Rs 120 a kg, compared to Rs 100 a month ago.
The recent price spike has been triggered by lowered stockpiles in China – the largest consumer and the world's largest auto market – which, in turn, caused futures in Tokyo to climb to $3,231 a tonne.
Blame – or praise – the monsoon rains for this phenomenon.
As the heavy rains hamper rubber tapping – rainfall has also disrupted production in Thailand, the world's biggest producer and exporter – demand for rubber remains while supply stays tight.
And yes, rubber planters can still go to sleep tight under their blankets since prices are forecast to rise.
According to commodity analysts, soaring oil prices and increased domestic demand from automobile manufacturers will continue to push prices upwards.
Wherever you place the blame – futures trading or unregulated imports –.the trend, experts say, is for rubber to reach a level of Rs 200-220/kg in the next quarter.
Will this price level hold? Remember, rubber is essentially elastic – what goes up must ultimately come down.
According to the International Rubber Study Group (IRSG), global automobile manufacturers have scaled back production, cut jobs and closed factories due to declining demand, causing rubber futures to dip.
Rubber planters face a deadly combination – a worldwide economic slowdown, a deepening slump in the global automobile industry, and continuing low oil prices
As the fourth largest producer of natural rubber in the world, after Thailand, Indonesia and Malaysia, India, with a share of between eight and nine per cent of the world's production, ought to be chary.
All the other rubber-growing giants are striving to increase productivity, but Kerala's rubber planters are happy raking in the easy money. According to the Kerala State Planning Board's Economic Review, the Stateaccounts for 81 per cent of the area under rubber in the country.
The coverage under the crop in 2008-09 was 5.17 lakh ha, higher by 5430 ha. over the previous year.
But productivity, which was 1,903 kg/hectare per year in 2008, dropped to 1,796 kg in 2009.
Unless Kerala's rubber planters pull up their socks and tend to their plantations with the zeal displayed by their competitors in Thailand, Indonesia and Malaysia, they cannot expect to ride the price tiger for long.
Rubber Climbs to One-Month High as Supply in China Declines
Posted: 27 Jun 2010 11:44 PM PDT
By Aya Takada
June 28 (Bloomberg) -- Rubber advanced to a one-month high after data showed stockpiles in China, the largest consumer, declined to the lowest level in seven years.
Futures in Tokyo climbed to 288.6 yen per kilogram ($3,231 a metric ton), matching a high reached on May 28. The price gained 3.8 percent last week, booking the second weekly increase, as rainfall disrupted production in Thailand, the world’s biggest producer and exporter.
Natural rubber stockpiles monitored by the Shanghai Futures Exchange dropped 1,670 tons to 14,771 tons, the bourse said on June 25. It was the lowest level since January 2003, according to the Bloomberg data.
“Chinese buyers may have withheld rubber purchases amid speculation that the raw material prices would drop on a seasonal increase in production,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “As rubber prices have stayed high,” they may step up buying to replenish inventories, he added.
Rubber for December delivery rose to 284.1 yen at 10:44 a.m. local time from its settlement of 278.6 yen on June 25. It has become the most-actively traded contract on the Tokyo Commodity Exchange after its listing on June 25.
November-delivery rubber on the Shanghai Futures Exchange added 1.7 percent to 22,265 yuan ($3,278) a ton at 9:47 a.m. local time. Earlier, it rose to 22,355 yuan, the highest level since June 2.
China Demand
China, the largest auto market, is the biggest consumer of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
The benchmark price in Thailand added 0.8 percent to 118.85 baht ($3.67) a kilogram, supported by limited supply and growing auto demand in many countries, the Rubber Institute of Thailand said June 25. The group, which reviews the price once a day, issues new data in the afternoon.
Rubber prices may climb 26 percent next year as supplies lag behind demand, according to Royal Bank of Scotland Asia Securities (Singapore) Pte.
Natural rubber may average $4,500 a ton next year, up from $3,580 a ton year-to-date, as “heavy rainfall in southern Thailand has disrupted supply” and “inventory levels in China are worse than we expected,” Nirgunan Tiruchelvam, a commodities analyst at the bank, said in an e-mailed report last week.
(bloomberg.com)
Climate change hits rubber productivity: Sajen Peter, Chairman, Rubber Board
Posted: 27 Jun 2010 11:37 PM PDT
A commodity that has wide industrial use and is largely produced by one million small growers, rubber always makes headlines whenever there are price fluctuations. While growers try to maximise their returns from the crop, user industries try to minimise raw material costs. In the midst of these opposing pulls and pressures, the government is making crop-specific intervention through the Rubber Board and the latter has been effective in increasing the acreage under the crop. Sajen Peter, the chairman of the Board, who is completing his tenure this August, spoke to S Sanandakumar on a variety of topics ranging from supply and demand and the impact of climate changes.
Climatic changes and their impact on crop production, including rubber, is a hot topic these days. What are your views on this phenomenon?
It is an important area of inquiry as far as rubber is concerned. In fact, I was one of the first persons to raise the issue in 2007 at Brussels at the meeting of the Advisory Panel of International Rubber Study Group (IRSG). I said that the IRSG should study the phenomenon and even suggested that they join hands with the Association of Natural Rubber Producing Countries (ANRPC) for the study. We, at the Rubber Board, did a study using the data of the last fifty years and found that warm nights are increasing steadily. This has had an impact. The productivity of rubber trees in India which stood at 1,903 kg per hectare per year in 2008 was down to 1,796 kg per hectare per year in 2009. Climate change is a significant factor for this fall in productivity though other factors also might have contributed.
What is the global demand for rubber?
The western markets will take more time to come back to their earlier growth path. But this has been counter-balanced by the growth of eastern markets, especially India and China. In this context, let me remind you that the IRSG had anticipated that India will become the second largest consumer of rubber by 2015-2020 which happened last year because of the fall in the consumption in the US market by around 34%. It is difficult to retain this position. But the slow recovery in western markets might give India more time at the second slot.
Is production increasing?
Rubber cultivation is spreading. This year, the supply-demand gap is only 85,000 tonnes. However, we started with an opening stock of 2.40 lakh tonnes.
Is the area expansion in the North-East going as per plans?
Yes. Our Fifth Plan target was to increase the area by 25,000 hectares in the North-East. So far, we have nearly 13,700 hectares under rubber plantation but this data is incomplete as it does not reflect the planted area for which subsidy has not been given. If we add that figure, the actual achievement would be close to target.
Rubber trees are seen as an answer against global warming. Your comment.
Yes. The green canopy of rubber is seen as an answer for global warming. But I am against the conversion of forest land for rubber cultivation. Only in the case of the North-East where jhum cultivation is practised, we do suggest rubber as an alternative. Also, I am against the conversion of land meant for food crops for rubber. To discourage this practice, we even deny planting subsidy in such cases where farmlands meant for food production are used for rubber cultivation.
The user industry has approached the Delhi High Court on the issue of rubber price. What are your views on this?
The government has set up a committee to study this as per the court order. As chairman of Rubber Board, I will be heading that committee and I still have to study the issues. But the amended Rubber Act clearly says that the question of fixing a minimum and maximum price for rubber is a matter to be decided by the government.
(economictimes.indiatimes.com)
Monday, June 28, 2010
Rubber futures flare up
Rubber futures flare up
Kottayam, June 26
The domestic rubber futures flared up on Saturday. The July series improved to Rs 181.98 (177.71), August to Rs 174.55 (170.21), September to Rs 168 (164.74) and October to Rs 164.90 (161.99) a kg for RSS 4 on National Multi Commodity Exchange (NMCE). The spot rubber prices were not available owing to hartal declared by various political parties.
Rubber Advances to One-Month High as China Stockpiles at Lowest Since 2003
Rubber advanced to a one-month high after data showed stockpiles in China, the largest consumer, declined to the lowest level in seven years.
Futures in Tokyo climbed to 288.6 yen per kilogram ($3,231 a metric ton), matching a high reached on May 28. The price gained 3.8 percent last week, booking the second weekly increase, as rainfall disrupted production in Thailand, the world’s biggest producer and exporter.
Natural rubber stockpiles monitored by the Shanghai Futures Exchange dropped 1,670 tons to 14,771 tons, the bourse said on June 25. It was the lowest level since January 2003, according to the Bloomberg data.
“Chinese buyers may have withheld rubber purchases amid speculation that the raw material prices would drop on a seasonal increase in production,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “As rubber prices have stayed high,” they may step up buying to replenish inventories, he added.
Rubber for December delivery rose to 284.1 yen at 10:44 a.m. local time from its settlement of 278.6 yen on June 25. It has become the most-actively traded contract on the Tokyo Commodity Exchange after its listing on June 25.
November-delivery rubber on the Shanghai Futures Exchange added 1.7 percent to 22,265 yuan ($3,278) a ton at 9:47 a.m. local time. Earlier, it rose to 22,355 yuan, the highest level since June 2.
China Demand
China, the largest auto market, is the biggest consumer of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
The benchmark price in Thailand added 0.8 percent to 118.85 baht ($3.67) a kilogram, supported by limited supply and growing auto demand in many countries, the Rubber Institute of Thailand said June 25. The group, which reviews the price once a day, issues new data in the afternoon.
Rubber prices may climb 26 percent next year as supplies lag behind demand, according to Royal Bank of Scotland Asia Securities (Singapore) Pte.
Natural rubber may average $4,500 a ton next year, up from $3,580 a ton year-to-date, as “heavy rainfall in southern Thailand has disrupted supply” and “inventory levels in China are worse than we expected,” Nirgunan Tiruchelvam, a commodities analyst at the bank, said in an e-mailed report last week.
Kottayam, June 26
The domestic rubber futures flared up on Saturday. The July series improved to Rs 181.98 (177.71), August to Rs 174.55 (170.21), September to Rs 168 (164.74) and October to Rs 164.90 (161.99) a kg for RSS 4 on National Multi Commodity Exchange (NMCE). The spot rubber prices were not available owing to hartal declared by various political parties.
Rubber Advances to One-Month High as China Stockpiles at Lowest Since 2003
Rubber advanced to a one-month high after data showed stockpiles in China, the largest consumer, declined to the lowest level in seven years.
Futures in Tokyo climbed to 288.6 yen per kilogram ($3,231 a metric ton), matching a high reached on May 28. The price gained 3.8 percent last week, booking the second weekly increase, as rainfall disrupted production in Thailand, the world’s biggest producer and exporter.
Natural rubber stockpiles monitored by the Shanghai Futures Exchange dropped 1,670 tons to 14,771 tons, the bourse said on June 25. It was the lowest level since January 2003, according to the Bloomberg data.
“Chinese buyers may have withheld rubber purchases amid speculation that the raw material prices would drop on a seasonal increase in production,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “As rubber prices have stayed high,” they may step up buying to replenish inventories, he added.
Rubber for December delivery rose to 284.1 yen at 10:44 a.m. local time from its settlement of 278.6 yen on June 25. It has become the most-actively traded contract on the Tokyo Commodity Exchange after its listing on June 25.
November-delivery rubber on the Shanghai Futures Exchange added 1.7 percent to 22,265 yuan ($3,278) a ton at 9:47 a.m. local time. Earlier, it rose to 22,355 yuan, the highest level since June 2.
China Demand
China, the largest auto market, is the biggest consumer of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
The benchmark price in Thailand added 0.8 percent to 118.85 baht ($3.67) a kilogram, supported by limited supply and growing auto demand in many countries, the Rubber Institute of Thailand said June 25. The group, which reviews the price once a day, issues new data in the afternoon.
Rubber prices may climb 26 percent next year as supplies lag behind demand, according to Royal Bank of Scotland Asia Securities (Singapore) Pte.
Natural rubber may average $4,500 a ton next year, up from $3,580 a ton year-to-date, as “heavy rainfall in southern Thailand has disrupted supply” and “inventory levels in China are worse than we expected,” Nirgunan Tiruchelvam, a commodities analyst at the bank, said in an e-mailed report last week.
Saturday, June 26, 2010
Rubber Has Second Weekly Gain on Supply Concern, Tire Sales
Rubber Has Second Weekly Gain on Supply Concern, Tire Sales
Posted: 25 Jun 2010 01:05 AM PDT
By Aya Takada
June 25 (Bloomberg) -- Rubber climbed for a third day on speculation that rainfall will disrupt output in Thailand, the world’s largest producer, making it difficult for suppliers to meet growing demand from tire makers.
Futures in Tokyo gained as much as 1.5 percent, nearing a one-week high reached yesterday. The price climbed 3.8 percent this week, booking the second weekly increase.
Bridgestone Corp., the largest tiremaker, raised its first- half net income forecast by 37 percent yesterday, citing higher sales and overseas prices. The monsoon covering the Andaman Sea and the Gulf of Thailand is causing heavy rains in many parts of the country, according to the Thai Meteorological Department.
“Futures were supported by a strong cash price amid speculation rain may keep disrupting tapping in Thailand,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “A bullish earnings outlook by Bridgestone was also positive to the market.”
November-delivery rubber gained as much as 4.3 yen to 285.2 yen per kilogram ($3,184 a metric ton) before settling at 284.7 yen on the Tokyo Commodity Exchange. The December-delivery contract, which was listed on the bourse today, settled at 278.6 yen after opening at 279 yen.
Bridgestone said yesterday net income in the six months ending June may be 37 billion yen ($413 million), compared with a previous projection of 27 billion yen. The company attributed the revision to increased tire sales and improvement in product prices in overseas markets.
Strong Demand
“Given the outlook, tire demand may remain strong for the rest of this year,” Saito said.
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Rubber prices may climb 26 percent next year as supplies lag behind demand, according to Royal Bank of Scotland Asia Securities (Singapore) Pte.
Natural rubber may average $4,500 a ton next year, up from $3,580 a ton year-to-date, as “heavy rainfall in southern Thailand has disrupted supply” and “inventory levels in China are worse than we expected,” Nirgunan Tiruchelvam, a commodities analyst at the bank, said in an e-mailed report.
The benchmark price in Thailand advanced 0.8 percent to 118.85 baht ($3.67) a kilogram, supported by limited supply and growing auto demand in many countries, the Rubber Institute of Thailand said on its website today.
November-delivery rubber on the Shanghai Futures Exchange added 0.4 percent to 21,890 yuan ($3,222) a ton at 3:00 p.m. local time.
(bloomberg.com)
Rubber, tea estates set to gain from rain, sunshine
Posted: 25 Jun 2010 01:04 AM PDT
C.J. Punnathara
Kochi, June 24
The intermittent rain and sunshine last week augurs a better crop for the rubber and tea plantations of South India, but is likely to dampen the cardamom production. Bouts of rains and sunshine is the ideal weather for rubber plantations since it augments better production as well as enable tapping operations, Mr N Radhakrishnan, former President of the Cochin Rubber Merchants Association, said.
The farmers were already enthused by the high reigning prices and these ideal weather conditions would have provided the final catalyst, Mr Radhakrishnan added. Also, almost 70-75 per cent of the plantations are reported to have undertaken rain-guarding of their trees to ensure that tapping continues unhindered even in the rains. However, arrivals to the markets have thinned out.
Renewed buying
And this had nothing to do with tapping or production but has more to do with speculation and holding back of stocks, sources in the trade said. The thinning arrivals were mainly due to the high prevalent prices which have prompted the farmer to hold back his stocks in anticipation that the price rise might be sustained into the coming days, the sources added. Reports of renewed buying by China from global rubber markets have also propped up the Indian rubber prices.
While international rubber sheet prices had often overtaken Indian prices in the recent past, sources pointed out that Standard Malaysian Rubber (SMR) prices were often reigning lower than the Indian prices. The corresponding domestic grade would be the Indian Standard Natural Rubber (ISNR) which is most often of a lower quality. While SMR is made from pure latex, ISNR is made from crump rubber, which is the residue from the hardened latex.
While the superior SMR prices are quoting in the Malaysian markets at Rs 135 a kg, the inferior ISNR prices are quoting over Rs 150, Mr Radhakrishnan said. This is mainly because of the weak demand for SBR from the developed markets of the West which were its traditional big importers. Most of the Asian markets trade in rubber sheets. Trade sources said that it would be feasible for India to import SMR at the current prices to stem the Indian price rise. However, they conceded that any news of imminent imports into India was likely to trigger price spiral in SMR.
Crop arrivals
Reports indicate that intermittent rains coupled with sunshine have resulted in a flush of new leaves in South Indian tea plantations and the crop arrivals have begun to pick up. And if the favourable weather condition persists, the crop in the coming months is likely to look up.
However, crops such as cardamom require huge amount of water and adequate amount of shade. The intermittent rains reported in several growing regions are reportedly not adequate to recharge the groundwater and ensure a good crop. But, we are only in the early part of the monsoon and consistent rains in the months ahead could very well change the outlook, farmers pointed out.
(thehindubusinessline.com)
Rubber price touches all-time high of Rs 173.50 a kg
Posted: 25 Jun 2010 01:03 AM PDT
NEW DELHI: The price of rubber today touched a new record high of Rs 173.50 per kg, mainly on account of high demand and tight supply.
"It is a new record. Heavy rains have affected rubber tapping and there is strong demand simultaneously from the domestic tyre industry," Rubber Dealers Association President George Valy said.
Also, growers are hoarding rubber as they expect prices to touch Rs 180 per kg, he noted, adding, "I will not be surprised if rubber quotes at Rs 175-176 a kg in a couple of days."
Valy said that growers could be holding on to 1.5 lakh tonnes of stocks as of now.
In addition to these factors, Cochin Rubber Merchants Association President N Radhakrishnan also attributed the movement in futures prices to the continuous rise in wholesale rates over the last five days.
On the National Multi-Commodity Exchange (NMCE), the July futures contract for the commodity reached a high of Rs 174.87 a kg before closing at Rs 172.41 per kg.
The price of natural rubber (RSS-4 variety) had stabilised at Rs 168-170.5 a kg only by the beginning of the month and remained within that range until June 19, after which it started rising steadily.
Over the last two months, rubber rates had been fluctuating between Rs 172 (the last all-time high level) and Rs 149 a kg.
Natural rubber production increased by 2 per cent to 54,600 tonnes in May, compared to 53,550 tonnes in the same month last year.
The Rubber Board has projected an output of 8.93 lakh tonnes for the 2010-11 fiscal, 7.4 per cent higher than 8.31 lakh tonnes in FY'10.
(economictimes.indiatimes.com)
Rise in spot rubber prices
Posted: 25 Jun 2010 01:02 AM PDT
On Thursday (24 June 2010), the spot rubber prices rose following the gains in the domestic and international rubber futures. Sheet rubber increased to Rs 173.50 from Rs 172 per kg though the tyre sector continued to stay back as usual.
The July futures for RSS 4 rose to Rs 174.67 (172.41), August to Rs 168 (167.40) and September to Rs 163.30 (162.68) per kg on the National Multi Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 173.50 (172); RSS-5: 171.50 (170); ungraded: 169.50 (168); ISNR 20: 154 (153) and latex 60 per cent: 122 (121).
(indiainfoline.com)
Spot rubber flares up on global cues
Kottayam, June 25
Physical rubber prices flared up on Friday as firm international markets added cheer to the domestic sentiments. Sheet rubber rebounded to Rs 177 from Rs 173.50 a kg and there were no quantity sellers even at higher levels. The trend was mixed as latex finished unchanged with comparatively low volumes.
Futures improve
RSS 4 improved with the July series rising to Rs 177.85 (174.65), August to Rs 170.50 (168.12), September to Rs 165 (163.21) and October to Rs 162 (160.21) a kg for RSS 4 on the National Multi Commodity Exchange. On the Tokyo Commodity Exchange , the July futures for RSS 3 increased to ¥363.7/Rs 188.04 (¥356.7), August to ¥340.2 (¥336.6), September to ¥319.9 (¥314.5), October to ¥397.7 (¥292.5) and November to ¥284.7 (¥280.9) while the December futures concluded the debut trading at ¥278.6 a kg during the day session. RSS 3 (spot) increased to Rs 169.98 (168.95) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 177 (173.50); RSS-5: 174 (171.50); ungraded: 172 (169.50); ISNR 20: 156 (154) and latex 60 per cent: 122 (122).
Rubber sector asked to face challenges
Our Bureau
Kochi, June 25
The rubber sector should equip itself to face the challenges posed by climate change, erosion in productive capacity of the soil and labour shortages, Mr Sajen Peter, Chairman of the Rubber Board, said.
Inaugurating the Rubber Grower's Conference 2010 at the Rubber Research Institute,he said that a permanent liaison of research and extension with the farming community is inevitable to orient the research and extension of the Board.
Dr James Jacob, Director of RRIL, who presided over the function observed that the increased interest in rubber cultivation shown by the younger generation is a welcome sign. The conference was organised with a view to collecting and compiling the experience of growers, who have either adopted age-old indigenous knowledge to suit their rubber cultivation or successfully conducted their own trials and experiments – thereby creating new models that can be simulated and replicated elsewhere. Growers as well as scientists and extension officers attended the conference.
Record rubber price
Kottayam: Natural rubber price rallied to a record Rs.176 a kg in the domestic market here on Friday, as demand from the automobile industry far outstripped supply. The highest price recorded this year was Rs.170.50 a kg on May 29. At the beginning of this month, the price was quoted at Rs.168 a kg and it grew steadily and reached the highest level on Friday, traders said. The price of RSS-4 variety stood at Rs.174 a kg on Thursday. Prices had registered an upward trend since the past three years. A decade ago, rubber price was Rs.25 a kg. (The Hindu)
LDF calls dawn-to-dusk hartal
Special Correspondent
Vaikom Viswan
THIRUVANANTHAPURAM: The ruling Left Democratic Front (LDF) has called a dawn-to-dusk hartal on Saturday to protest against the hike in the prices of petroleum products and the United Progressive Alliance (UPA) government's decision to decontrol petroleum product pricing.
The LDF State committee decided to organise the hartal at a hurried meeting held here close on the heels of the Centre announcing its decision to decontrol petroleum product pricing and to effect a sharp increase in the prices of petrol, diesel, cooking gas and kerosene.
Briefing reporters after the LDF panel meeting here on Friday, front convener Vaikom Viswan termed the UPA government's decision a major blow, particularly to the people of Kerala who were dependent on goods brought in from different parts of the country. He came down heavily on what he termed attempts of Congress leaders to justify the Central decision and their demand that the State should forego the additional revenue from the price hike so that the impact of the price hike could be made lighter.
“How can they take the brief to defend a decision that hurts the people of Kerala? Where is the question of foregoing the additional revenue if there is no price increase at all? It is most unfortunate that persons like Leader of the Opposition Oommen Chandy are coming up with such arguments,” Mr. Viswan said and pointed out that this was the third hike in petroleum prices effected by the UPA government within the last one year.
The LDF convener said of greater importance than the price hike was the decision to do away with the system of administered pricing of petroleum products. Mr. Viswan said there was no merit in the contention that the prices of petroleum products would come down depending on the market movements as prices that went up never came down.
Truck rentals set to rise 5%
Vehicle shortage, buoyant economy to boost demand.
Mumbai, June 25
Road freight rates will go up by nearly 5 per cent per cent with immediate effect following the Rs 2-a-litre hike in diesel prices.
“An immediate impact is bound to be there,” said Mr S.P. Singh, Co-ordinator, Indian Foundation of Transport Research and Training (IFTRT).
As a result, truck rental for a nine-tonne payload from Mumbai-Delhi-Mumbai will increase to Rs 50,500 from Rs 48,100. Similarly, a Delhi-Chennai-Delhi trip's rental will work out in excess of Rs 80,000 from Rs 76,200.
For freight operators, fuel accounts for 60 per cent of operating costs, followed by tyres at 30 per cent.
Truck rentals had gone up by 3 to 5 per cent in May-June. IFTRT, which tracks the prices every month, said the steep increase in cargo offerings from fresh summer fruits, vegetables and wheat crop along with double-digit growth in manufacturing sector and foreign trade pushed up the freight rate.
Rentals have also flared up due to the 12-15 per cent hike in tyre prices during the last three months.
Mr Singh said the prices had jumped 22-25 per cent since last November. He, however, does not see freight demand falling.
“The economy is buoyant. There is a 17 per cent growth in the manufacturing sector. Export-import cargo movement went up by 25-30 per cent. This has caused an increase in road freight cost. Certain market situations could determine future rate hikes,” said Mr Singh.
The shortage of trucks is compounding the rate increase. Of the over 16 lakh vehicles operating on inter-State routes, nearly 10 per cent could not have their national permits renewed following the confusion on emission norms, says IFTRT.
Posted: 25 Jun 2010 01:05 AM PDT
By Aya Takada
June 25 (Bloomberg) -- Rubber climbed for a third day on speculation that rainfall will disrupt output in Thailand, the world’s largest producer, making it difficult for suppliers to meet growing demand from tire makers.
Futures in Tokyo gained as much as 1.5 percent, nearing a one-week high reached yesterday. The price climbed 3.8 percent this week, booking the second weekly increase.
Bridgestone Corp., the largest tiremaker, raised its first- half net income forecast by 37 percent yesterday, citing higher sales and overseas prices. The monsoon covering the Andaman Sea and the Gulf of Thailand is causing heavy rains in many parts of the country, according to the Thai Meteorological Department.
“Futures were supported by a strong cash price amid speculation rain may keep disrupting tapping in Thailand,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “A bullish earnings outlook by Bridgestone was also positive to the market.”
November-delivery rubber gained as much as 4.3 yen to 285.2 yen per kilogram ($3,184 a metric ton) before settling at 284.7 yen on the Tokyo Commodity Exchange. The December-delivery contract, which was listed on the bourse today, settled at 278.6 yen after opening at 279 yen.
Bridgestone said yesterday net income in the six months ending June may be 37 billion yen ($413 million), compared with a previous projection of 27 billion yen. The company attributed the revision to increased tire sales and improvement in product prices in overseas markets.
Strong Demand
“Given the outlook, tire demand may remain strong for the rest of this year,” Saito said.
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Rubber prices may climb 26 percent next year as supplies lag behind demand, according to Royal Bank of Scotland Asia Securities (Singapore) Pte.
Natural rubber may average $4,500 a ton next year, up from $3,580 a ton year-to-date, as “heavy rainfall in southern Thailand has disrupted supply” and “inventory levels in China are worse than we expected,” Nirgunan Tiruchelvam, a commodities analyst at the bank, said in an e-mailed report.
The benchmark price in Thailand advanced 0.8 percent to 118.85 baht ($3.67) a kilogram, supported by limited supply and growing auto demand in many countries, the Rubber Institute of Thailand said on its website today.
November-delivery rubber on the Shanghai Futures Exchange added 0.4 percent to 21,890 yuan ($3,222) a ton at 3:00 p.m. local time.
(bloomberg.com)
Rubber, tea estates set to gain from rain, sunshine
Posted: 25 Jun 2010 01:04 AM PDT
C.J. Punnathara
Kochi, June 24
The intermittent rain and sunshine last week augurs a better crop for the rubber and tea plantations of South India, but is likely to dampen the cardamom production. Bouts of rains and sunshine is the ideal weather for rubber plantations since it augments better production as well as enable tapping operations, Mr N Radhakrishnan, former President of the Cochin Rubber Merchants Association, said.
The farmers were already enthused by the high reigning prices and these ideal weather conditions would have provided the final catalyst, Mr Radhakrishnan added. Also, almost 70-75 per cent of the plantations are reported to have undertaken rain-guarding of their trees to ensure that tapping continues unhindered even in the rains. However, arrivals to the markets have thinned out.
Renewed buying
And this had nothing to do with tapping or production but has more to do with speculation and holding back of stocks, sources in the trade said. The thinning arrivals were mainly due to the high prevalent prices which have prompted the farmer to hold back his stocks in anticipation that the price rise might be sustained into the coming days, the sources added. Reports of renewed buying by China from global rubber markets have also propped up the Indian rubber prices.
While international rubber sheet prices had often overtaken Indian prices in the recent past, sources pointed out that Standard Malaysian Rubber (SMR) prices were often reigning lower than the Indian prices. The corresponding domestic grade would be the Indian Standard Natural Rubber (ISNR) which is most often of a lower quality. While SMR is made from pure latex, ISNR is made from crump rubber, which is the residue from the hardened latex.
While the superior SMR prices are quoting in the Malaysian markets at Rs 135 a kg, the inferior ISNR prices are quoting over Rs 150, Mr Radhakrishnan said. This is mainly because of the weak demand for SBR from the developed markets of the West which were its traditional big importers. Most of the Asian markets trade in rubber sheets. Trade sources said that it would be feasible for India to import SMR at the current prices to stem the Indian price rise. However, they conceded that any news of imminent imports into India was likely to trigger price spiral in SMR.
Crop arrivals
Reports indicate that intermittent rains coupled with sunshine have resulted in a flush of new leaves in South Indian tea plantations and the crop arrivals have begun to pick up. And if the favourable weather condition persists, the crop in the coming months is likely to look up.
However, crops such as cardamom require huge amount of water and adequate amount of shade. The intermittent rains reported in several growing regions are reportedly not adequate to recharge the groundwater and ensure a good crop. But, we are only in the early part of the monsoon and consistent rains in the months ahead could very well change the outlook, farmers pointed out.
(thehindubusinessline.com)
Rubber price touches all-time high of Rs 173.50 a kg
Posted: 25 Jun 2010 01:03 AM PDT
NEW DELHI: The price of rubber today touched a new record high of Rs 173.50 per kg, mainly on account of high demand and tight supply.
"It is a new record. Heavy rains have affected rubber tapping and there is strong demand simultaneously from the domestic tyre industry," Rubber Dealers Association President George Valy said.
Also, growers are hoarding rubber as they expect prices to touch Rs 180 per kg, he noted, adding, "I will not be surprised if rubber quotes at Rs 175-176 a kg in a couple of days."
Valy said that growers could be holding on to 1.5 lakh tonnes of stocks as of now.
In addition to these factors, Cochin Rubber Merchants Association President N Radhakrishnan also attributed the movement in futures prices to the continuous rise in wholesale rates over the last five days.
On the National Multi-Commodity Exchange (NMCE), the July futures contract for the commodity reached a high of Rs 174.87 a kg before closing at Rs 172.41 per kg.
The price of natural rubber (RSS-4 variety) had stabilised at Rs 168-170.5 a kg only by the beginning of the month and remained within that range until June 19, after which it started rising steadily.
Over the last two months, rubber rates had been fluctuating between Rs 172 (the last all-time high level) and Rs 149 a kg.
Natural rubber production increased by 2 per cent to 54,600 tonnes in May, compared to 53,550 tonnes in the same month last year.
The Rubber Board has projected an output of 8.93 lakh tonnes for the 2010-11 fiscal, 7.4 per cent higher than 8.31 lakh tonnes in FY'10.
(economictimes.indiatimes.com)
Rise in spot rubber prices
Posted: 25 Jun 2010 01:02 AM PDT
On Thursday (24 June 2010), the spot rubber prices rose following the gains in the domestic and international rubber futures. Sheet rubber increased to Rs 173.50 from Rs 172 per kg though the tyre sector continued to stay back as usual.
The July futures for RSS 4 rose to Rs 174.67 (172.41), August to Rs 168 (167.40) and September to Rs 163.30 (162.68) per kg on the National Multi Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 173.50 (172); RSS-5: 171.50 (170); ungraded: 169.50 (168); ISNR 20: 154 (153) and latex 60 per cent: 122 (121).
(indiainfoline.com)
Spot rubber flares up on global cues
Kottayam, June 25
Physical rubber prices flared up on Friday as firm international markets added cheer to the domestic sentiments. Sheet rubber rebounded to Rs 177 from Rs 173.50 a kg and there were no quantity sellers even at higher levels. The trend was mixed as latex finished unchanged with comparatively low volumes.
Futures improve
RSS 4 improved with the July series rising to Rs 177.85 (174.65), August to Rs 170.50 (168.12), September to Rs 165 (163.21) and October to Rs 162 (160.21) a kg for RSS 4 on the National Multi Commodity Exchange. On the Tokyo Commodity Exchange , the July futures for RSS 3 increased to ¥363.7/Rs 188.04 (¥356.7), August to ¥340.2 (¥336.6), September to ¥319.9 (¥314.5), October to ¥397.7 (¥292.5) and November to ¥284.7 (¥280.9) while the December futures concluded the debut trading at ¥278.6 a kg during the day session. RSS 3 (spot) increased to Rs 169.98 (168.95) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 177 (173.50); RSS-5: 174 (171.50); ungraded: 172 (169.50); ISNR 20: 156 (154) and latex 60 per cent: 122 (122).
Rubber sector asked to face challenges
Our Bureau
Kochi, June 25
The rubber sector should equip itself to face the challenges posed by climate change, erosion in productive capacity of the soil and labour shortages, Mr Sajen Peter, Chairman of the Rubber Board, said.
Inaugurating the Rubber Grower's Conference 2010 at the Rubber Research Institute,he said that a permanent liaison of research and extension with the farming community is inevitable to orient the research and extension of the Board.
Dr James Jacob, Director of RRIL, who presided over the function observed that the increased interest in rubber cultivation shown by the younger generation is a welcome sign. The conference was organised with a view to collecting and compiling the experience of growers, who have either adopted age-old indigenous knowledge to suit their rubber cultivation or successfully conducted their own trials and experiments – thereby creating new models that can be simulated and replicated elsewhere. Growers as well as scientists and extension officers attended the conference.
Record rubber price
Kottayam: Natural rubber price rallied to a record Rs.176 a kg in the domestic market here on Friday, as demand from the automobile industry far outstripped supply. The highest price recorded this year was Rs.170.50 a kg on May 29. At the beginning of this month, the price was quoted at Rs.168 a kg and it grew steadily and reached the highest level on Friday, traders said. The price of RSS-4 variety stood at Rs.174 a kg on Thursday. Prices had registered an upward trend since the past three years. A decade ago, rubber price was Rs.25 a kg. (The Hindu)
LDF calls dawn-to-dusk hartal
Special Correspondent
Vaikom Viswan
THIRUVANANTHAPURAM: The ruling Left Democratic Front (LDF) has called a dawn-to-dusk hartal on Saturday to protest against the hike in the prices of petroleum products and the United Progressive Alliance (UPA) government's decision to decontrol petroleum product pricing.
The LDF State committee decided to organise the hartal at a hurried meeting held here close on the heels of the Centre announcing its decision to decontrol petroleum product pricing and to effect a sharp increase in the prices of petrol, diesel, cooking gas and kerosene.
Briefing reporters after the LDF panel meeting here on Friday, front convener Vaikom Viswan termed the UPA government's decision a major blow, particularly to the people of Kerala who were dependent on goods brought in from different parts of the country. He came down heavily on what he termed attempts of Congress leaders to justify the Central decision and their demand that the State should forego the additional revenue from the price hike so that the impact of the price hike could be made lighter.
“How can they take the brief to defend a decision that hurts the people of Kerala? Where is the question of foregoing the additional revenue if there is no price increase at all? It is most unfortunate that persons like Leader of the Opposition Oommen Chandy are coming up with such arguments,” Mr. Viswan said and pointed out that this was the third hike in petroleum prices effected by the UPA government within the last one year.
The LDF convener said of greater importance than the price hike was the decision to do away with the system of administered pricing of petroleum products. Mr. Viswan said there was no merit in the contention that the prices of petroleum products would come down depending on the market movements as prices that went up never came down.
Truck rentals set to rise 5%
Vehicle shortage, buoyant economy to boost demand.
Mumbai, June 25
Road freight rates will go up by nearly 5 per cent per cent with immediate effect following the Rs 2-a-litre hike in diesel prices.
“An immediate impact is bound to be there,” said Mr S.P. Singh, Co-ordinator, Indian Foundation of Transport Research and Training (IFTRT).
As a result, truck rental for a nine-tonne payload from Mumbai-Delhi-Mumbai will increase to Rs 50,500 from Rs 48,100. Similarly, a Delhi-Chennai-Delhi trip's rental will work out in excess of Rs 80,000 from Rs 76,200.
For freight operators, fuel accounts for 60 per cent of operating costs, followed by tyres at 30 per cent.
Truck rentals had gone up by 3 to 5 per cent in May-June. IFTRT, which tracks the prices every month, said the steep increase in cargo offerings from fresh summer fruits, vegetables and wheat crop along with double-digit growth in manufacturing sector and foreign trade pushed up the freight rate.
Rentals have also flared up due to the 12-15 per cent hike in tyre prices during the last three months.
Mr Singh said the prices had jumped 22-25 per cent since last November. He, however, does not see freight demand falling.
“The economy is buoyant. There is a 17 per cent growth in the manufacturing sector. Export-import cargo movement went up by 25-30 per cent. This has caused an increase in road freight cost. Certain market situations could determine future rate hikes,” said Mr Singh.
The shortage of trucks is compounding the rate increase. Of the over 16 lakh vehicles operating on inter-State routes, nearly 10 per cent could not have their national permits renewed following the confusion on emission norms, says IFTRT.
Friday, June 25, 2010
Rubber prices hit all-time high-Spot rubber improves on global cues
Spot rubber improves on global cues
Kottayam, June 24
Rubber prices ruled firm on Thursday. In spot, the market improved following the gains in the domestic and international rubber futures. The under current became strong as the TOCOM June series expired higher indicating the global demand. Sheet rubber improved to Rs 174.00 from Rs 172 a kg though the tyre sector continued to stay back as usual. The traders were under the shadow of short supplies.
Futures firm
In futures, the July series firmed up to Rs 174.67 (172.41), August to Rs 168 (167.40), September to Rs 163.30 (162.68) and October to Rs 160.21 (160.25) a kg for RSS 4 on the National Multi Commodity Exchange. The June futures expired at ¥372/Rs 193.73 (¥364) while the July futures improved to ¥356.7 (¥349.5), August to ¥336.6 (¥330.2), September to ¥314.5 (¥308.3), October to ¥292.5 (¥387.4) and November to ¥280.9 (¥277.9) a kg for RSS 3 during the day session on the Tokyo Commodity Exchange. RSS 3 (spot) increased to Rs 168.95 (166.78) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 174.00 (172); RSS-5: 171.50 (170); ungraded: 169.50 (168); ISNR 20: 154 (153) and latex 60 per cent: 122 (121).
Rubber prices hit all-time high
Bringing cheer to the nearly a million rubber farmers in Kerala, the price of natural rubber (RSS-4) touched an all-time high of Rs.174 a kg in the Kottayam market and Rs.173 in Kochi on Thursday.
The rubber price, which hit a rock bottom of Rs.25 a kg a decade ago, has been on the march for nearly three years now. Market watchers say the price rally is likely to continue in view of the heavy rain which prevent rubber tapping. The month opened at Rs.168 a kg and it grew steadily to the record price on Thursday. The price of latex too has risen to around Rs.120 a kg from below Rs.100 a month ago.
The mismatch between demand and supply is the main propeller of the price rise. Thanks to the booming automobile industry in India, the demand for tyre has escalated. (Natural rubber is the main raw material in tyre manufacture.) Globally too, the demand for natural rubber is on the rise.
There is supply stickiness at the international level too. One of the reasons is the political turmoil and the consequent constraints on production and marketing in Thailand, which has emerged as the top producer of rubber. While major producing countries such as Thailand, Indonesia and Malaysia are fast switching over to block rubber, Kerala, which produces more than 90 per cent of India's rubber, is still sticking to sheet rubber which has its own captive market in India.
N. Radhakrishnan, former president of the Cochin Rubber Merchants Association, blames futures trading in rubber for the price escalation. He sees no major reason other than the speculative dealings brought in by the futures trade which began in 2004. “There is no physical delivery of the product,” he told The Hindu. “It is computer-based deal and often 10 to 15 times of the actual production are put on sale.” He thinks that the current price rally will be ultimately harmful to both the rubber industry and farmers. “Only the speculators stand to gain,” he rues.
The growers, expecting better prices in the future, hold back their stock and this creates artificial scarcity, thus leading to the price rise, market sources said. Usually, during the monsoon season, prices rise as there is heavy shortfall in supply because the tapping operation is hampered, they point out.
However, for now, the farmers are smiling and the Kerala economy, which has relied on rubber and Gulf money for meeting the State's financial needs, is smiling too.
Campco 's rubber procurement centre in Kerala
Mangalore, June 24
The Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd opened a rubber procurement centre at Bandadka in Kerala recently. A press release said here that Mr Nalin Kumar Kateel, Rubber Board member, inaugurated the rubber procurement centre, in the presence of the Campco President, Mr K. Padmanabha, and the Campco Managing Director, Mr A.S. Bhat. Mr Kateel urged the cooperative to start its own rubber processing unit on the lines of its chocolate factory. “The cooperative, which started the chocolate factory three decades ago to help cocoa growers in the region, should now think of starting a rubber processing unit,” he added. – Our Bureau
Rubber, tea estates set to gain from rain, sunshine
But showers inadequate for cardamom plants.
Almost 70-75 per cent of the plantations are reported to have undertaken rain-guarding of their trees to ensure that tapping continues.
Kochi, June 24
The intermittent rain and sunshine last week augurs a better crop for the rubber and tea plantations of South India, but is likely to dampen the cardamom production. Bouts of rains and sunshine is the ideal weather for rubber plantations since it augments better production as well as enable tapping operations, Mr N Radhakrishnan, former President of the Cochin Rubber Merchants Association, said.
The farmers were already enthused by the high reigning prices and these ideal weather conditions would have provided the final catalyst, Mr Radhakrishnan added. Also, almost 70-75 per cent of the plantations are reported to have undertaken rain-guarding of their trees to ensure that tapping continues unhindered even in the rains. However, arrivals to the markets have thinned out.
Renewed buying
And this had nothing to do with tapping or production but has more to do with speculation and holding back of stocks, sources in the trade said. The thinning arrivals were mainly due to the high prevalent prices which have prompted the farmer to hold back his stocks in anticipation that the price rise might be sustained into the coming days, the sources added. Reports of renewed buying by China from global rubber markets have also propped up the Indian rubber prices.
While international rubber sheet prices had often overtaken Indian prices in the recent past, sources pointed out that Standard Malaysian Rubber (SMR) prices were often reigning lower than the Indian prices. The corresponding domestic grade would be the Indian Standard Natural Rubber (ISNR) which is most often of a lower quality. While SMR is made from pure latex, ISNR is made from crump rubber, which is the residue from the hardened latex.
While the superior SMR prices are quoting in the Malaysian markets at Rs 135 a kg, the inferior ISNR prices are quoting over Rs 150, Mr Radhakrishnan said. This is mainly because of the weak demand for SBR from the developed markets of the West which were its traditional big importers. Most of the Asian markets trade in rubber sheets. Trade sources said that it would be feasible for India to import SMR at the current prices to stem the Indian price rise. However, they conceded that any news of imminent imports into India was likely to trigger price spiral in SMR.
Crop arrivals
Reports indicate that intermittent rains coupled with sunshine have resulted in a flush of new leaves in South Indian tea plantations and the crop arrivals have begun to pick up. And if the favourable weather condition persists, the crop in the coming months is likely to look up.
However, crops such as cardamom require huge amount of water and adequate amount of shade. The intermittent rains reported in several growing regions are reportedly not adequate to recharge the groundwater and ensure a good crop. But, we are only in the early part of the monsoon and consistent rains in the months ahead could very well change the outlook, farmers pointed out.
Rubber Board to hold growers meet today
Our Bureau
Kochi, June 24
With a view to collect and compile the experiences of growers who have either successfully adopted age-old indigenous knowledge to suit rubber cultivation, or successfully conducted their own trials and experiments in their farms to create new models that can be emulated and replicated elsewhere, the Rubber Board has convened a rubber grower's conference on June 25.
The conference is to be inaugurated by Mr Sajen Peter, Chairman of the Rubber Board at the Rubber Research Institute of India, and presided over by Dr James Jacob, Director of RRII. This interactive conference is to be attended by growers as well as scientists and extension officers of the board.
Discussions
Twenty two growers will present their papers in addition to 20 poster exhibitions, a press release from the Rubber Board said. The areas of discussion would include rubber propagation, new cultivars, land preparation, planting, maintenance and after care of holdings, manuring, soil protection and water conservation, reduction of immaturity period, plant protection and crop processing.
Kottayam, June 24
Rubber prices ruled firm on Thursday. In spot, the market improved following the gains in the domestic and international rubber futures. The under current became strong as the TOCOM June series expired higher indicating the global demand. Sheet rubber improved to Rs 174.00 from Rs 172 a kg though the tyre sector continued to stay back as usual. The traders were under the shadow of short supplies.
Futures firm
In futures, the July series firmed up to Rs 174.67 (172.41), August to Rs 168 (167.40), September to Rs 163.30 (162.68) and October to Rs 160.21 (160.25) a kg for RSS 4 on the National Multi Commodity Exchange. The June futures expired at ¥372/Rs 193.73 (¥364) while the July futures improved to ¥356.7 (¥349.5), August to ¥336.6 (¥330.2), September to ¥314.5 (¥308.3), October to ¥292.5 (¥387.4) and November to ¥280.9 (¥277.9) a kg for RSS 3 during the day session on the Tokyo Commodity Exchange. RSS 3 (spot) increased to Rs 168.95 (166.78) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 174.00 (172); RSS-5: 171.50 (170); ungraded: 169.50 (168); ISNR 20: 154 (153) and latex 60 per cent: 122 (121).
Rubber prices hit all-time high
Bringing cheer to the nearly a million rubber farmers in Kerala, the price of natural rubber (RSS-4) touched an all-time high of Rs.174 a kg in the Kottayam market and Rs.173 in Kochi on Thursday.
The rubber price, which hit a rock bottom of Rs.25 a kg a decade ago, has been on the march for nearly three years now. Market watchers say the price rally is likely to continue in view of the heavy rain which prevent rubber tapping. The month opened at Rs.168 a kg and it grew steadily to the record price on Thursday. The price of latex too has risen to around Rs.120 a kg from below Rs.100 a month ago.
The mismatch between demand and supply is the main propeller of the price rise. Thanks to the booming automobile industry in India, the demand for tyre has escalated. (Natural rubber is the main raw material in tyre manufacture.) Globally too, the demand for natural rubber is on the rise.
There is supply stickiness at the international level too. One of the reasons is the political turmoil and the consequent constraints on production and marketing in Thailand, which has emerged as the top producer of rubber. While major producing countries such as Thailand, Indonesia and Malaysia are fast switching over to block rubber, Kerala, which produces more than 90 per cent of India's rubber, is still sticking to sheet rubber which has its own captive market in India.
N. Radhakrishnan, former president of the Cochin Rubber Merchants Association, blames futures trading in rubber for the price escalation. He sees no major reason other than the speculative dealings brought in by the futures trade which began in 2004. “There is no physical delivery of the product,” he told The Hindu. “It is computer-based deal and often 10 to 15 times of the actual production are put on sale.” He thinks that the current price rally will be ultimately harmful to both the rubber industry and farmers. “Only the speculators stand to gain,” he rues.
The growers, expecting better prices in the future, hold back their stock and this creates artificial scarcity, thus leading to the price rise, market sources said. Usually, during the monsoon season, prices rise as there is heavy shortfall in supply because the tapping operation is hampered, they point out.
However, for now, the farmers are smiling and the Kerala economy, which has relied on rubber and Gulf money for meeting the State's financial needs, is smiling too.
Campco 's rubber procurement centre in Kerala
Mangalore, June 24
The Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd opened a rubber procurement centre at Bandadka in Kerala recently. A press release said here that Mr Nalin Kumar Kateel, Rubber Board member, inaugurated the rubber procurement centre, in the presence of the Campco President, Mr K. Padmanabha, and the Campco Managing Director, Mr A.S. Bhat. Mr Kateel urged the cooperative to start its own rubber processing unit on the lines of its chocolate factory. “The cooperative, which started the chocolate factory three decades ago to help cocoa growers in the region, should now think of starting a rubber processing unit,” he added. – Our Bureau
Rubber, tea estates set to gain from rain, sunshine
But showers inadequate for cardamom plants.
Almost 70-75 per cent of the plantations are reported to have undertaken rain-guarding of their trees to ensure that tapping continues.
Kochi, June 24
The intermittent rain and sunshine last week augurs a better crop for the rubber and tea plantations of South India, but is likely to dampen the cardamom production. Bouts of rains and sunshine is the ideal weather for rubber plantations since it augments better production as well as enable tapping operations, Mr N Radhakrishnan, former President of the Cochin Rubber Merchants Association, said.
The farmers were already enthused by the high reigning prices and these ideal weather conditions would have provided the final catalyst, Mr Radhakrishnan added. Also, almost 70-75 per cent of the plantations are reported to have undertaken rain-guarding of their trees to ensure that tapping continues unhindered even in the rains. However, arrivals to the markets have thinned out.
Renewed buying
And this had nothing to do with tapping or production but has more to do with speculation and holding back of stocks, sources in the trade said. The thinning arrivals were mainly due to the high prevalent prices which have prompted the farmer to hold back his stocks in anticipation that the price rise might be sustained into the coming days, the sources added. Reports of renewed buying by China from global rubber markets have also propped up the Indian rubber prices.
While international rubber sheet prices had often overtaken Indian prices in the recent past, sources pointed out that Standard Malaysian Rubber (SMR) prices were often reigning lower than the Indian prices. The corresponding domestic grade would be the Indian Standard Natural Rubber (ISNR) which is most often of a lower quality. While SMR is made from pure latex, ISNR is made from crump rubber, which is the residue from the hardened latex.
While the superior SMR prices are quoting in the Malaysian markets at Rs 135 a kg, the inferior ISNR prices are quoting over Rs 150, Mr Radhakrishnan said. This is mainly because of the weak demand for SBR from the developed markets of the West which were its traditional big importers. Most of the Asian markets trade in rubber sheets. Trade sources said that it would be feasible for India to import SMR at the current prices to stem the Indian price rise. However, they conceded that any news of imminent imports into India was likely to trigger price spiral in SMR.
Crop arrivals
Reports indicate that intermittent rains coupled with sunshine have resulted in a flush of new leaves in South Indian tea plantations and the crop arrivals have begun to pick up. And if the favourable weather condition persists, the crop in the coming months is likely to look up.
However, crops such as cardamom require huge amount of water and adequate amount of shade. The intermittent rains reported in several growing regions are reportedly not adequate to recharge the groundwater and ensure a good crop. But, we are only in the early part of the monsoon and consistent rains in the months ahead could very well change the outlook, farmers pointed out.
Rubber Board to hold growers meet today
Our Bureau
Kochi, June 24
With a view to collect and compile the experiences of growers who have either successfully adopted age-old indigenous knowledge to suit rubber cultivation, or successfully conducted their own trials and experiments in their farms to create new models that can be emulated and replicated elsewhere, the Rubber Board has convened a rubber grower's conference on June 25.
The conference is to be inaugurated by Mr Sajen Peter, Chairman of the Rubber Board at the Rubber Research Institute of India, and presided over by Dr James Jacob, Director of RRII. This interactive conference is to be attended by growers as well as scientists and extension officers of the board.
Discussions
Twenty two growers will present their papers in addition to 20 poster exhibitions, a press release from the Rubber Board said. The areas of discussion would include rubber propagation, new cultivars, land preparation, planting, maintenance and after care of holdings, manuring, soil protection and water conservation, reduction of immaturity period, plant protection and crop processing.
Thursday, June 24, 2010
Spot rubber prices gain with futures
Spot rubber prices gain with futures
Kottayam, June 23
Physical rubber prices improved further following gains in the domestic and international rubber futures. Sheet rubber closed firm at Rs 172 against Rs 171 a kg, while the market made all-round gains mainly on covering purchases. The transactions were dull.
Futures gain
In futures, the July series increased to Rs 172.33 (170.05), August to Rs 167.31 (165.05), September to Rs 162.70 (160.23) and October to Rs 160.25 (158.51) a kg for RSS 4 on the National Multi Commodity Exchange. RSS 3 improved with the June futures rising to ¥364/Rs 186.30 (¥354), July to ¥349.5 (¥347.2), August to ¥330.2 (¥328.2), September to ¥308.3 (¥306), October to ¥387.4 (¥285.5) and November to ¥277.9 (¥277.6) a kg during the day session on the Tokyo Commodity Exchange. RSS 3 (spot) recovered to Rs 166.78 (165.45) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 172 (171); RSS-5: 170 (169); ungraded: 168 (167); ISNR 20: 153 (152) and latex 60 per cent: 121 (120).
Rubber Climbs on Expectations of Chinese Purchases, Slowing Thai Supplies
Posted: 23 Jun 2010 06:47 AM PDT
Rubber advanced for a second time in three days on expectations of Chinese buying as stockpiles fall and supplies from Thailand, the largest grower, increase at a slower pace than estimated.
Futures in Tokyo climbed as much as 0.5 percent to 279.1 yen per kilogram ($3,087 a metric ton) after falling 1.4 percent earlier today. The most-active contract is heading for a second weekly gain amid optimism that Europe’s sovereign-debt crisis may not substantially weaken demand for the commodity used to make tires and gloves.
“Heavy rainfall in southern Thailand has sparked worries that supplies may not be as much as expected,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. “Low stockpiles in China also boosted optimism the biggest buyers will soon start building inventories.”
Rubber for November-delivery settled at 277.9 yen per kilogram, adding 0.1 percent from yesterday, on the Tokyo Commodity Exchange.
The November-delivery contract on the Shanghai Futures Exchange gained 0.1 percent to settle at 21,520 yuan ($3,161) a ton.
“Low level of rubber stocks in Japan and Shanghai” supported the market gains, said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
China’s natural rubber inventories fell 1,440 tons to 16,441 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said June 18. It is the lowest level since 2003, according to data compiled by Bloomberg.
China Imports
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Rains are spreading in southern Thailand, with heavy rains in some province, the Meteorological Department said on its website today. Thailand’s southern provinces represent 68 percent of total rubber plantation area.
“Nearby contracts will probably stabilize as production from Thailand will increasingly come onto the market,” Katsumi Kinoshita, senior manager for Institutional Department, Orion Koeki Co. Ltd., said by phone from Kobe.
Rubber for June-delivery gained as much as 2.8 percent to settle at 364 yen per kilogram.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
(bloomberg.com)
Kottayam, June 23
Physical rubber prices improved further following gains in the domestic and international rubber futures. Sheet rubber closed firm at Rs 172 against Rs 171 a kg, while the market made all-round gains mainly on covering purchases. The transactions were dull.
Futures gain
In futures, the July series increased to Rs 172.33 (170.05), August to Rs 167.31 (165.05), September to Rs 162.70 (160.23) and October to Rs 160.25 (158.51) a kg for RSS 4 on the National Multi Commodity Exchange. RSS 3 improved with the June futures rising to ¥364/Rs 186.30 (¥354), July to ¥349.5 (¥347.2), August to ¥330.2 (¥328.2), September to ¥308.3 (¥306), October to ¥387.4 (¥285.5) and November to ¥277.9 (¥277.6) a kg during the day session on the Tokyo Commodity Exchange. RSS 3 (spot) recovered to Rs 166.78 (165.45) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 172 (171); RSS-5: 170 (169); ungraded: 168 (167); ISNR 20: 153 (152) and latex 60 per cent: 121 (120).
Rubber Climbs on Expectations of Chinese Purchases, Slowing Thai Supplies
Posted: 23 Jun 2010 06:47 AM PDT
Rubber advanced for a second time in three days on expectations of Chinese buying as stockpiles fall and supplies from Thailand, the largest grower, increase at a slower pace than estimated.
Futures in Tokyo climbed as much as 0.5 percent to 279.1 yen per kilogram ($3,087 a metric ton) after falling 1.4 percent earlier today. The most-active contract is heading for a second weekly gain amid optimism that Europe’s sovereign-debt crisis may not substantially weaken demand for the commodity used to make tires and gloves.
“Heavy rainfall in southern Thailand has sparked worries that supplies may not be as much as expected,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. “Low stockpiles in China also boosted optimism the biggest buyers will soon start building inventories.”
Rubber for November-delivery settled at 277.9 yen per kilogram, adding 0.1 percent from yesterday, on the Tokyo Commodity Exchange.
The November-delivery contract on the Shanghai Futures Exchange gained 0.1 percent to settle at 21,520 yuan ($3,161) a ton.
“Low level of rubber stocks in Japan and Shanghai” supported the market gains, said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
China’s natural rubber inventories fell 1,440 tons to 16,441 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said June 18. It is the lowest level since 2003, according to data compiled by Bloomberg.
China Imports
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Rains are spreading in southern Thailand, with heavy rains in some province, the Meteorological Department said on its website today. Thailand’s southern provinces represent 68 percent of total rubber plantation area.
“Nearby contracts will probably stabilize as production from Thailand will increasingly come onto the market,” Katsumi Kinoshita, senior manager for Institutional Department, Orion Koeki Co. Ltd., said by phone from Kobe.
Rubber for June-delivery gained as much as 2.8 percent to settle at 364 yen per kilogram.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
(bloomberg.com)
Wednesday, June 23, 2010
Spot rubber gains on supply concerns
Spot rubber gains on supply concerns
Kottayam, June 22
Spot rubber improved further on Tuesday. According to sources, the market remained firm on supply concerns as there were no quantity sellers in the main marketing centres. A better closing in the domestic futures also catalysed the market mood.
Sheet rubber firmed up to Rs 171 from Rs 170 a kg amidst low volumes. The trend was mixed as ISNR 20 closed flat while latex 60 per cent declined on low demand.
The July series improved to Rs 170.19 (168.42), August to Rs 165 (163.46), September to Rs 160.10 (159.06) and October to Rs 158.50 (157.45) a kg for RSS 4 on the National Multi Commodity Exchange. RSS 3 weakened with June futures dropping to ¥354/Rs 180.47 (¥355.1), July to ¥347.2 (¥350), August to ¥328.2 (¥ 331), September to ¥306 (¥309), October to ¥285.5 (¥ 289.5) and November to ¥277.6 (282.6) a kg during the day session on Tokyo Commodity Exchange. The June futures recovered to¥356.7 (Rs 181.84), July to ¥348.6, August to ¥329.4, September to ¥307 and October to ¥286 while the November futures slipped to ¥277 a kg on late trades. RSS 3 (spot) moved down to Rs 165.45 (166.72) a kg at Bangkok.
Spot prices (Rs/kg) were: RSS-4:171 (170); RSS-5:169 (168.50); Ungraded:167 (166); ISNR 20:152 (152) and Latex 60 per cent:120 (121.50).
Rubber Advances on Expectations of Chinese Buying, Slowing Thai Supplies
By Supunnabul Suwannakij - Jun 23, 2010
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Rubber advanced for a second time in three days on expectations of Chinese buying as stockpiles fall and supplies from Thailand, the largest grower, increase at a slower pace than estimated.
Futures in Tokyo climbed as much as 0.5 percent to 279.1 yen per kilogram ($3,087 a metric ton) after falling 1.4 percent earlier today. The most-active contract is heading for a second weekly gain amid optimism that Europe’s sovereign-debt crisis may not substantially weaken demand for the commodity used to make tires and gloves.
“Heavy rainfall in southern Thailand has sparked worries that supplies may not be as much as expected,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. “Low stockpiles in China also boosted optimism the biggest buyers will soon start building inventories.”
Rubber for November-delivery settled at 277.9 yen per kilogram, adding 0.1 percent from yesterday, on the Tokyo Commodity Exchange.
The November-delivery contract on the Shanghai Futures Exchange gained 0.1 percent to settle at 21,520 yuan ($3,161) a ton.
“Low level of rubber stocks in Japan and Shanghai” supported the market gains, said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
China’s natural rubber inventories fell 1,440 tons to 16,441 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said June 18. It is the lowest level since 2003, according to data compiled by Bloomberg.
China Imports
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Rains are spreading in southern Thailand, with heavy rains in some province, the Meteorological Department said on its website today. Thailand’s southern provinces represent 68 percent of total rubber plantation area.
“Nearby contracts will probably stabilize as production from Thailand will increasingly come onto the market,” Katsumi Kinoshita, senior manager for Institutional Department, Orion Koeki Co. Ltd., said by phone from Kobe.
Rubber for June-delivery gained as much as 2.8 percent to settle at 364 yen per kilogram.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
Kottayam, June 22
Spot rubber improved further on Tuesday. According to sources, the market remained firm on supply concerns as there were no quantity sellers in the main marketing centres. A better closing in the domestic futures also catalysed the market mood.
Sheet rubber firmed up to Rs 171 from Rs 170 a kg amidst low volumes. The trend was mixed as ISNR 20 closed flat while latex 60 per cent declined on low demand.
The July series improved to Rs 170.19 (168.42), August to Rs 165 (163.46), September to Rs 160.10 (159.06) and October to Rs 158.50 (157.45) a kg for RSS 4 on the National Multi Commodity Exchange. RSS 3 weakened with June futures dropping to ¥354/Rs 180.47 (¥355.1), July to ¥347.2 (¥350), August to ¥328.2 (¥ 331), September to ¥306 (¥309), October to ¥285.5 (¥ 289.5) and November to ¥277.6 (282.6) a kg during the day session on Tokyo Commodity Exchange. The June futures recovered to¥356.7 (Rs 181.84), July to ¥348.6, August to ¥329.4, September to ¥307 and October to ¥286 while the November futures slipped to ¥277 a kg on late trades. RSS 3 (spot) moved down to Rs 165.45 (166.72) a kg at Bangkok.
Spot prices (Rs/kg) were: RSS-4:171 (170); RSS-5:169 (168.50); Ungraded:167 (166); ISNR 20:152 (152) and Latex 60 per cent:120 (121.50).
Rubber Advances on Expectations of Chinese Buying, Slowing Thai Supplies
By Supunnabul Suwannakij - Jun 23, 2010
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Rubber advanced for a second time in three days on expectations of Chinese buying as stockpiles fall and supplies from Thailand, the largest grower, increase at a slower pace than estimated.
Futures in Tokyo climbed as much as 0.5 percent to 279.1 yen per kilogram ($3,087 a metric ton) after falling 1.4 percent earlier today. The most-active contract is heading for a second weekly gain amid optimism that Europe’s sovereign-debt crisis may not substantially weaken demand for the commodity used to make tires and gloves.
“Heavy rainfall in southern Thailand has sparked worries that supplies may not be as much as expected,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. “Low stockpiles in China also boosted optimism the biggest buyers will soon start building inventories.”
Rubber for November-delivery settled at 277.9 yen per kilogram, adding 0.1 percent from yesterday, on the Tokyo Commodity Exchange.
The November-delivery contract on the Shanghai Futures Exchange gained 0.1 percent to settle at 21,520 yuan ($3,161) a ton.
“Low level of rubber stocks in Japan and Shanghai” supported the market gains, said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
China’s natural rubber inventories fell 1,440 tons to 16,441 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said June 18. It is the lowest level since 2003, according to data compiled by Bloomberg.
China Imports
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Rains are spreading in southern Thailand, with heavy rains in some province, the Meteorological Department said on its website today. Thailand’s southern provinces represent 68 percent of total rubber plantation area.
“Nearby contracts will probably stabilize as production from Thailand will increasingly come onto the market,” Katsumi Kinoshita, senior manager for Institutional Department, Orion Koeki Co. Ltd., said by phone from Kobe.
Rubber for June-delivery gained as much as 2.8 percent to settle at 364 yen per kilogram.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
Tuesday, June 22, 2010
Rubber Declines as Crude Oil Retreats, Optimism On Chinese Currency Fades
Rubber Declines as Crude Oil Retreats, Optimism On Chinese Currency Fades
Posted: 21 Jun 2010 10:51 PM PDT
Rubber dropped for the third time in four days as the price of crude oil declined and optimism faded over China’s demand.
Futures in Tokyo declined as much as 2.1 percent after climbing 3 percent yesterday, nearing a two-week high of 286.7 yen reached on June 16. Prices gained after China signaled it will unshackle the yuan’s fixed rate to the dollar, stoking speculation that the world’s largest consumer may boost imports.
“The good news from the yuan flexibility has faded as it lacked support from Wall Street,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
Rubber for November-delivery dropped as much as 5.8 yen to 276.8 yen per kilogram ($3,039 a metric ton) before trading at 278.5 yen on the Tokyo Commodity Exchange at 11:45 a.m.
The November-delivery contract on the Shanghai Futures Exchange declined 0.7 percent to 21,535 yuan ($3,162) a ton. Yesterday, the price climbed to 22,200 yuan, the highest level since June 3.
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may boost gross imports of the raw material to 1.68 million tons this year from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Oil Falls
“The market is in correction mode after sharp gains yesterday,” said Kazunori Kokubo, general manager for International Business Department at Yutaka Shoji Ltd. “Oil is also down, driving the rubber market lower.”
Crude oil declined for the first time in three days as optimism faded that China’s plan to add more flexibility in the yuan’s fixed exchange rate would strengthen the global economic recovery. A drop in crude oil cuts the appetite for rubber, used to make tires.
Increasing supply from Thailand added pressure to the rubber market, Chaiwat said from Bangkok. An average of 200 tons of ribbed smoked sheet RSS-3 rubber a day is available in the market this month, compared with slightly more than 100 tons a day in May, he said.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
(bloomberg.com)
Toyota Affiliate Denso Says Chinese Parts Factory Is Shuttered by Strike
Posted: 21 Jun 2010 10:51 PM PDT
Toyota Motor Corp. was hit by at least the third strike among its suppliers in China as widening labor unrest continued to disrupt Japanese manufacturers’ output in the world’s biggest auto market.
Workers at a venture of Denso Corp., Japan’s biggest auto- parts maker, walked out yesterday, shutting the plant in Guangzhou, Guangdong province, Toshihiro Nishiwaki, a spokesman for the Aichi, Japan-based company, said by phone today. The parts maker is in talks with the employees, who are demanding higher pay and improved benefits, he said.
Labor unrest in China is spreading to Toyota after employees at suppliers to Honda Motor Co. agreed to return to work with promises of higher pay. Toyota closed a factory in Tianjin on June 18 because of a strike at supplier Toyoda Gosei Co. in the northern Chinese city, said Mieko Iwasaki, a spokeswoman for the carmaker.
“So far, at this stage, the strikes are occurring at Japanese suppliers,” which pay about half the wage level of European and American companies, said Lin Huaibin, an analyst in Shanghai at consulting company IHS Global Insight. “We could see unrest spread to Korean and Taiwanese makers.”
Denso is about 23 percent owned by Toyota, the world’s largest carmaker, according to data compiled by Bloomberg.
Toyota said it’s unclear whether the strike will impact production at the carmaker’s ventures in Guangzhou and Tianjin, said Niu Yu, a Beijing-based spokesman for the carmaker. Shen Meihua, Denso’s Beijing-based spokeswoman, wasn’t immediately available for comment.
Six Strikes
Toyota fell 0.6 percent to 3,275 yen as of 1:52 p.m. in Tokyo trading, while Denso dropped 1.4 percent.
Denso Guangzhou Nansha Co., the joint venture in Guangzhou, manufactures and supplies fuel injection systems for customers including Toyota. The venture employs about 1,100 workers, according to a Denso company report.
Suppliers to Toyota and Honda agreed to raise wages as at least six previous strikes broke out at their Chinese factories in the past month, disrupting their production in the world’s largest auto market.
Toyota affiliate Toyoda Gosei Co. ended a strike on June 19. Workers at another Toyota supplier, Tianjin Star Light Rubber and Plastic Co., also walked out briefly on June 15 before the dispute was settled when the company offered a pay increase.
Pay Increases
Honda agreed last month to raise pay 24 percent for workers at a parts plant in Foshan after a strike shut down all four of its China car factories. Another Honda parts supplier in Foshan, Guangdong, was shut June 7 to June 10 by a walkout.
More than 20 Chinese provinces and cities, including the manufacturing hub Shenzhen, raised minimum wages this year to help companies recruit workers and to boost domestic consumption, the city government said this month.
Higher investment and improved wages in western China are deterring workers from migrating, pushing up pay in more industrialized regions like Guangdong in the south, said David Abrahamson, project manager at the China Center for Labor and Environment.
Workers say the pay increases are necessary to help keep pace with the rising cost of living in the world’s most populous nation. Inflation accelerated to an annual pace of 3.1 percent in May, the biggest increase in 19 months. Property prices in May jumped 12.4 percent across 70 cities from a year earlier, the government said June 10.
(bloomberg.com)
Rubber shows its elasticity as market prices bounce about
Posted: 21 Jun 2010 10:49 PM PDT
By Daryl Guppy
BEIJING, June 22 (Xinhaunet) -- Every day thousands of new cars hit the roads in China and they all travel on rubber tires. The four wheels on your car, or the 14 wheels on the trucks hurtling between Beijing and Shandong and beyond are the most obvious evidence of the importance of the rubber industry.
This increasing demand is distorting rubber pricing in the same way that other commodity prices are also distorted. The price behavior moves beyond the simple relationship between supply and demand and is influenced by derivative price behavior.
The basics of this market are simple economics. Rubber is extracted from trees using methods, which have not changed significantly in the last 100 years.
It's labor intensive and suitable for small farmers and larger plantations. When demand is high there is a push to increase the cultivation area for rubber.
This supply lags demand because it takes around 7 years before a rubber tree starts to produce rubber but the tree continues production for around 25 years.
The alternative to natural rubber is synthetic rubber, which is a by-product of the oil industry. When oil prices are high the demand for cheaper natural rubber increases.
When oil prices are low synthetic rubber becomes cheaper and the demand for natural rubber falls. Traditionally the analysis of future rubber price movements has been closely tied to the future price of oil.
At the recent ASEAN Rubber Conference in Malaysia I examined the three features that dominate the rubber 2010 outlook. The first feature is market and trend volatility and trend divergence. The second is currency volatility.
The third is the recent confirmation of a head and shoulders pattern in the Japanese Tokyo Commodity Exchange rubber market. This pattern is a very reliable indication of significant downtrend pressure. The first two features affect many commodity prices.
Combined, they have a substantial impact on the price objectives for rubber. They also have a very large impact on the stability and continuity of the trend. Trend instability is a feature of global financial and commodity markets after the global financial crisis.
The first feature is the divergence in price trend behavior between oil and rubber. The rubber price has continued to move strongly upwards at a time when the oil price remained relatively stable.
This is an unsustainable bubble and it leads to longer term price corrections in the rubber price as the normal oil and rubber price relationship is re-established.
This bubble is influenced by the second feature, the currency volatility in the dollar index. In the past year the behavior of the rubber price closely follows the behavior of the dollar index.
This is a new behavioral relationship. The recent trend in the dollar index is defined with a parabolic curve, which suggests a significant correction will develop. This dollar index volatility transfers to the rubber pricing. The third feature is the recent confirmation of the strong head and shoulder pattern in the Japanese rubber market. This supports the bubble analysis derived from the first two features.
The head and shoulder pattern is not as strong in the Shanghai Rubber Futures market but it gives a downside target near 19,200 yuan. The pattern is invalidated with a move above 24,500 yuan.
Commodity pricing behavior is no longer a simple matter of seasonal supply and demand. Commodity investment funds have moved into this area. They are using a variety of financial methods and derivatives to 'invest' in commodities by using futures on a long-term basis.
The development of commodity funds that use exchanged traded notes based on holding futures positions for long-term investment has an impact on the market.
This reduces the efficiency of the commodity futures markets by reducing day-to-day liquidity.
This lack of liquidity helps to create price bubbles that are not related to underlying demand and supply of the commodity.
These pricing anomalies are further exaggerated by currency volatility. Commodity traders need to develop currency-hedging skills to manage the new commodity trend instability.
The author is a well-known international financial technical analysis expert.
(news.xinhuanet.com)
Firm expands Cambodian rubber plantations
Posted: 21 Jun 2010 10:47 PM PDT
HA NOI —The Dong Nai and Dong Phu companies under the Viet Nam Rubber Group (VRG) unveiled a new phase of rubber plantations in Sombo District of Kratie Province in Cambodia last Saturday.
The move is part of VRG's plan to grow 100,000ha of rubber trees in Cambodia by 2012.
VRG Chairman Le Quang Thung said the group's investment in Cambodia had not only yielded profit but also brought social benefits. The project has so far provided jobs to over 2,000 Cambodian workers at the rubber plantations.
Senior Minister of the Cambodia Ministry of Land Management, Urban Planning and Construction Im Chhun Lim said that the VRG had contributed to job generation and poverty reduction in Cambodia.
The two companies have been licensed to grow rubber trees on 16,000ha of land in Sombo District.
In the 2008-09 crop, they planted over 2,000ha and plan to cultivate an additional 2,000ha in 2010.
The VRG said it planned to invest $55 million in growing an additional 16,000ha of rubber trees in five Cambodian provinces this year, including 8,900ha in Kampong Thom, 7,500ha in Kratie, 1,500ha in Ratanakiri, 1,100ha in Stung Treng, and 1,000ha in Preah Vihear.
The plantations are expected to begin producing latex in 2017 with a total output of 150,000 tonnes, to be increased to 250,000 tonnes in 2020.
(vietnamnews.vnagency.com.vn)
Posted: 21 Jun 2010 10:51 PM PDT
Rubber dropped for the third time in four days as the price of crude oil declined and optimism faded over China’s demand.
Futures in Tokyo declined as much as 2.1 percent after climbing 3 percent yesterday, nearing a two-week high of 286.7 yen reached on June 16. Prices gained after China signaled it will unshackle the yuan’s fixed rate to the dollar, stoking speculation that the world’s largest consumer may boost imports.
“The good news from the yuan flexibility has faded as it lacked support from Wall Street,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
Rubber for November-delivery dropped as much as 5.8 yen to 276.8 yen per kilogram ($3,039 a metric ton) before trading at 278.5 yen on the Tokyo Commodity Exchange at 11:45 a.m.
The November-delivery contract on the Shanghai Futures Exchange declined 0.7 percent to 21,535 yuan ($3,162) a ton. Yesterday, the price climbed to 22,200 yuan, the highest level since June 3.
China, the world’s largest auto market, is the biggest user of natural rubber. The nation may boost gross imports of the raw material to 1.68 million tons this year from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.
Oil Falls
“The market is in correction mode after sharp gains yesterday,” said Kazunori Kokubo, general manager for International Business Department at Yutaka Shoji Ltd. “Oil is also down, driving the rubber market lower.”
Crude oil declined for the first time in three days as optimism faded that China’s plan to add more flexibility in the yuan’s fixed exchange rate would strengthen the global economic recovery. A drop in crude oil cuts the appetite for rubber, used to make tires.
Increasing supply from Thailand added pressure to the rubber market, Chaiwat said from Bangkok. An average of 200 tons of ribbed smoked sheet RSS-3 rubber a day is available in the market this month, compared with slightly more than 100 tons a day in May, he said.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
(bloomberg.com)
Toyota Affiliate Denso Says Chinese Parts Factory Is Shuttered by Strike
Posted: 21 Jun 2010 10:51 PM PDT
Toyota Motor Corp. was hit by at least the third strike among its suppliers in China as widening labor unrest continued to disrupt Japanese manufacturers’ output in the world’s biggest auto market.
Workers at a venture of Denso Corp., Japan’s biggest auto- parts maker, walked out yesterday, shutting the plant in Guangzhou, Guangdong province, Toshihiro Nishiwaki, a spokesman for the Aichi, Japan-based company, said by phone today. The parts maker is in talks with the employees, who are demanding higher pay and improved benefits, he said.
Labor unrest in China is spreading to Toyota after employees at suppliers to Honda Motor Co. agreed to return to work with promises of higher pay. Toyota closed a factory in Tianjin on June 18 because of a strike at supplier Toyoda Gosei Co. in the northern Chinese city, said Mieko Iwasaki, a spokeswoman for the carmaker.
“So far, at this stage, the strikes are occurring at Japanese suppliers,” which pay about half the wage level of European and American companies, said Lin Huaibin, an analyst in Shanghai at consulting company IHS Global Insight. “We could see unrest spread to Korean and Taiwanese makers.”
Denso is about 23 percent owned by Toyota, the world’s largest carmaker, according to data compiled by Bloomberg.
Toyota said it’s unclear whether the strike will impact production at the carmaker’s ventures in Guangzhou and Tianjin, said Niu Yu, a Beijing-based spokesman for the carmaker. Shen Meihua, Denso’s Beijing-based spokeswoman, wasn’t immediately available for comment.
Six Strikes
Toyota fell 0.6 percent to 3,275 yen as of 1:52 p.m. in Tokyo trading, while Denso dropped 1.4 percent.
Denso Guangzhou Nansha Co., the joint venture in Guangzhou, manufactures and supplies fuel injection systems for customers including Toyota. The venture employs about 1,100 workers, according to a Denso company report.
Suppliers to Toyota and Honda agreed to raise wages as at least six previous strikes broke out at their Chinese factories in the past month, disrupting their production in the world’s largest auto market.
Toyota affiliate Toyoda Gosei Co. ended a strike on June 19. Workers at another Toyota supplier, Tianjin Star Light Rubber and Plastic Co., also walked out briefly on June 15 before the dispute was settled when the company offered a pay increase.
Pay Increases
Honda agreed last month to raise pay 24 percent for workers at a parts plant in Foshan after a strike shut down all four of its China car factories. Another Honda parts supplier in Foshan, Guangdong, was shut June 7 to June 10 by a walkout.
More than 20 Chinese provinces and cities, including the manufacturing hub Shenzhen, raised minimum wages this year to help companies recruit workers and to boost domestic consumption, the city government said this month.
Higher investment and improved wages in western China are deterring workers from migrating, pushing up pay in more industrialized regions like Guangdong in the south, said David Abrahamson, project manager at the China Center for Labor and Environment.
Workers say the pay increases are necessary to help keep pace with the rising cost of living in the world’s most populous nation. Inflation accelerated to an annual pace of 3.1 percent in May, the biggest increase in 19 months. Property prices in May jumped 12.4 percent across 70 cities from a year earlier, the government said June 10.
(bloomberg.com)
Rubber shows its elasticity as market prices bounce about
Posted: 21 Jun 2010 10:49 PM PDT
By Daryl Guppy
BEIJING, June 22 (Xinhaunet) -- Every day thousands of new cars hit the roads in China and they all travel on rubber tires. The four wheels on your car, or the 14 wheels on the trucks hurtling between Beijing and Shandong and beyond are the most obvious evidence of the importance of the rubber industry.
This increasing demand is distorting rubber pricing in the same way that other commodity prices are also distorted. The price behavior moves beyond the simple relationship between supply and demand and is influenced by derivative price behavior.
The basics of this market are simple economics. Rubber is extracted from trees using methods, which have not changed significantly in the last 100 years.
It's labor intensive and suitable for small farmers and larger plantations. When demand is high there is a push to increase the cultivation area for rubber.
This supply lags demand because it takes around 7 years before a rubber tree starts to produce rubber but the tree continues production for around 25 years.
The alternative to natural rubber is synthetic rubber, which is a by-product of the oil industry. When oil prices are high the demand for cheaper natural rubber increases.
When oil prices are low synthetic rubber becomes cheaper and the demand for natural rubber falls. Traditionally the analysis of future rubber price movements has been closely tied to the future price of oil.
At the recent ASEAN Rubber Conference in Malaysia I examined the three features that dominate the rubber 2010 outlook. The first feature is market and trend volatility and trend divergence. The second is currency volatility.
The third is the recent confirmation of a head and shoulders pattern in the Japanese Tokyo Commodity Exchange rubber market. This pattern is a very reliable indication of significant downtrend pressure. The first two features affect many commodity prices.
Combined, they have a substantial impact on the price objectives for rubber. They also have a very large impact on the stability and continuity of the trend. Trend instability is a feature of global financial and commodity markets after the global financial crisis.
The first feature is the divergence in price trend behavior between oil and rubber. The rubber price has continued to move strongly upwards at a time when the oil price remained relatively stable.
This is an unsustainable bubble and it leads to longer term price corrections in the rubber price as the normal oil and rubber price relationship is re-established.
This bubble is influenced by the second feature, the currency volatility in the dollar index. In the past year the behavior of the rubber price closely follows the behavior of the dollar index.
This is a new behavioral relationship. The recent trend in the dollar index is defined with a parabolic curve, which suggests a significant correction will develop. This dollar index volatility transfers to the rubber pricing. The third feature is the recent confirmation of the strong head and shoulder pattern in the Japanese rubber market. This supports the bubble analysis derived from the first two features.
The head and shoulder pattern is not as strong in the Shanghai Rubber Futures market but it gives a downside target near 19,200 yuan. The pattern is invalidated with a move above 24,500 yuan.
Commodity pricing behavior is no longer a simple matter of seasonal supply and demand. Commodity investment funds have moved into this area. They are using a variety of financial methods and derivatives to 'invest' in commodities by using futures on a long-term basis.
The development of commodity funds that use exchanged traded notes based on holding futures positions for long-term investment has an impact on the market.
This reduces the efficiency of the commodity futures markets by reducing day-to-day liquidity.
This lack of liquidity helps to create price bubbles that are not related to underlying demand and supply of the commodity.
These pricing anomalies are further exaggerated by currency volatility. Commodity traders need to develop currency-hedging skills to manage the new commodity trend instability.
The author is a well-known international financial technical analysis expert.
(news.xinhuanet.com)
Firm expands Cambodian rubber plantations
Posted: 21 Jun 2010 10:47 PM PDT
HA NOI —The Dong Nai and Dong Phu companies under the Viet Nam Rubber Group (VRG) unveiled a new phase of rubber plantations in Sombo District of Kratie Province in Cambodia last Saturday.
The move is part of VRG's plan to grow 100,000ha of rubber trees in Cambodia by 2012.
VRG Chairman Le Quang Thung said the group's investment in Cambodia had not only yielded profit but also brought social benefits. The project has so far provided jobs to over 2,000 Cambodian workers at the rubber plantations.
Senior Minister of the Cambodia Ministry of Land Management, Urban Planning and Construction Im Chhun Lim said that the VRG had contributed to job generation and poverty reduction in Cambodia.
The two companies have been licensed to grow rubber trees on 16,000ha of land in Sombo District.
In the 2008-09 crop, they planted over 2,000ha and plan to cultivate an additional 2,000ha in 2010.
The VRG said it planned to invest $55 million in growing an additional 16,000ha of rubber trees in five Cambodian provinces this year, including 8,900ha in Kampong Thom, 7,500ha in Kratie, 1,500ha in Ratanakiri, 1,100ha in Stung Treng, and 1,000ha in Preah Vihear.
The plantations are expected to begin producing latex in 2017 with a total output of 150,000 tonnes, to be increased to 250,000 tonnes in 2020.
(vietnamnews.vnagency.com.vn)
Spot rubber up on tight supply
Spot rubber up on tight supply
Kochi, June 21
Select grades of rubber ended slightly higher on Monday on tight supply due to sellers holding back stocks hoping for further rise in prices, dealers said.
According to the Rubber Board, the benchmark RSS-4 grade inched up to Rs 170.50 a kg in Kottayam compared with the previous closing price of Rs 170.
In Kochi, the grade closed at Rs 170.25 a kg, it said. Firm trends in key Asian markets such as Tokyo may help the commodity to trade up on Tuesday, dealers said.
On NMCE, rubber futures were range-bound before ending with slight gains amid subdued demand, traders said. The active July contract, which hit an intra-day high of Rs 16,899 for 100 kg, settled at Rs 16,848 , up Rs 47, while the August settlement rose to Rs 16,350 compared with Rs 16,344 on Saturday.
In the Tokyo Commodity Exchange, rubber futures traded up on renewed demand during the day session as the benchmark November settlement rose to ¥282.6 a kg (Rs 141.58) from ¥274.4 while, the June contract inched up to ¥355.1 from ¥354 on Friday.
In Bangkok, RSS-3 grade, equivalent of the RSS-4 grade here, declined to Rs 166.72 a kg from Rs 168.64, according to the Rubber Board's data. In Kottayam, latex price largely declined to Rs 118.50 a kg from Rs 121 in the previous session. — © NewsWire18 Pvt. Ltd. 2010
Toyota, Honda Raise China Wages as Yuan's Flexibility to Threaten Profits
Posted: 20 Jun 2010 10:47 PM PDT
Toyota Motor Corp. and Honda Motor Co. suppliers sacrificed earnings in China by raising wages to end strikes, and the government’s decision to allow greater exchange-rate flexibility may slow plans to export vehicles from the nation if the move leads to an appreciation of the currency.
China’s central bank will allow the yuan more flexibility, it said in a statement on June 19, signaling an end to the currency’s two-year-old peg to the dollar.
The looser currency stance comes “on the back of all these moves to endorse the wage increases,” Jim O’Neill, Goldman Sachs Group Inc.’s chief global economist, said in a Bloomberg Television interview yesterday. “It’s all part of moving to the consumer, more domestic-demand-driven economy.”
Labor unrest that disrupted output at Toyota and Honda’s plants in China in the past month forced their suppliers in the country to increase wages. In addition to the higher labor costs, an appreciation of the yuan may hamper plans to export Chinese- made vehicles by carmakers including Honda, which operates an export-only factory in Guangzhou, Guangdong province.
“Honda probably has to have second thoughts on its export plant,” Koji Endo, managing director at Advanced Research Japan, said today in a Bloomberg Television interview.
Toyota, Japan’s biggest automaker, rose 2.3 percent as of the 11 a.m. midday break in Tokyo trading, while Honda, the second-largest, gained 3.5 percent. Nissan Motor Co., Japan’s third-largest carmaker, advanced 3 percent.
Chinese Export Goal
The Chinese government aims to boost exports of vehicles and parts to $85 billion by 2015 from at least $19 billion last year and the equivalent of 10 percent of the global auto trade by 2020.
Japanese carmakers won’t change plans to build vehicles in China for the domestic market, in part because of import duties, Endo said.
“China will continue to be the biggest car market in the world, and the growth rate will continue to be strong,” he said.
A stronger Chinese currency will help contain inflation, which may reduce worker wage demands, David Cohen, director for economic forecasting at Singapore-based Action Economics, said in a telephone interview yesterday.
Japanese carmakers and other foreign manufacturers including Taiwan’s Foxconn Technology Group, are spending more on labor as a result of recent unrest. Foxconn, which makes iPhones for Apple Inc., said it will double salaries for its lowest-paid workers after at least 10 Chinese employees killed themselves this year.
Toyota Supplier Strike
Toyoda Gosei Co., an affiliate of Toyota, ended a strike on June 19 that had disrupted car assembly, said Mieko Iwasaki, a Tokyo-based spokeswoman for Toyota. The company’s car plants in China are operating normally today, she said.
Akemi Ando, a spokeswoman for Honda, said the Tokyo-based company’s Chinese factories were also running as usual.
Iwasaki and Ando both declined to comment on the yuan decision’s impact on the companies.
Higher investment and improved wages in western China are deterring workers from migrating, pushing up pay in more industrialized regions like Guangdong in the south, said David Abrahamson, project manager at the China Center for Labor and Environment.
Minimum Wages
More than 20 Chinese provinces and cities raised minimum wages this year, the Shenzhen city government said on its website. In Shenzhen, which raised minimum wages an average of 15.8 percent, the government said higher pay will help companies recruit workers and will boost consumption.
Honda Lock (Guangdong) Co. ended a strike after employees at the Honda supplier agreed on June 18 to accept wage increases, said Takayuki Fujii, a Beijing-based spokesman for the carmaker. He declined to comment on the raise. Workers at the Zhongshan, Guangdong province, plant began their walkout on June 9 and suspended industrial action five days later as union leaders and management negotiated pay raises.
Honda ended the first strike at an affiliate on June 3 after agreeing to a 24 percent wage increase.
The fourth Honda affiliate to be hit by a walkout in the region, Nihon Plast Co., agreed to raise wages on June 19, Mutsuo Suzuki, a spokesman for the Shizuoka, Japan-based parts maker, said by phone today.
Nihon Plast
The pay increase was smaller than workers had demanded, Suzuki said, declining to specify further. The plant lost a day and a half of production before resuming output late on June 18, he said.
Nihon Plast is 21 percent owned by Honda, according to data compiled by Bloomberg. The company also supplies parts to Nissan and Suzuki Motor Corp., according to its website.
The Zhongshan factory, a joint venture between Nihon Plast and Osaka, Japan-based Itochu Corp., makes steering wheels for all models produced at Nissan’s Chinese venture, Dongfeng Nissan Passenger Vehicle Co. Mitsuru Yonekawa, a spokesman at Nissan, said the Yokohama-based company’s car production in China wasn’t affected by the Nihon Plast strike.
Workers at another Toyota supplier in China, Tianjin Star Light Rubber and Plastic Co., also walked out briefly on June 15. The issue was resolved when the company offered a pay increase.
Chongqing Brewery Co.’s operations returned to normal on the evening of June 18 after workers ended a strike, the Shanghai Securities News reported today, citing an unidentified company official.
(bloomberg.com)
Rubber Advances as China's Signal on 2-Year Yuan Peg May Boost Imports
Posted: 20 Jun 2010 10:45 PM PDT
Rubber climbed for the first day in three after China signaled it will unshackle the yuan’s fixed rate to the dollar, stoking speculation the world’s largest consumer may boost imports of the commodity.
Futures in Tokyo climbed as much as 2.2 percent, extending last week’s 3.6 percent increase. The price reached a two-week high of 286.7 yen on June 16 amid optimism that Europe’s sovereign-debt crisis may not stall global recovery.
The People’s Bank of China said on June 19 it may allow the yuan to move higher, making imports more affordable to buyers in the world’s third-largest economy. Asian shares and commodities surged while the dollar weakened against major counterparts as China’s move boosted investor confidence.
“A stronger yuan would encourage Chinese tire makers to increase rubber purchases from overseas to cut costs,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone.
November-delivery rubber gained as much as 6 yen to 280.4 yen per kilogram ($3,090 a metric ton) before trading at 280.2 yen on the Tokyo Commodity Exchange at 12:42 p.m.
November-delivery rubber on the Shanghai Futures Exchange added 2.3 percent to 21,695 yuan ($3,184) a ton. Earlier, the price increased to 21,735 yuan, the highest level since June 17.
China, the world’s largest auto market, is also the biggest user of natural rubber. The nation may boost gross imports of the raw material to 1.68 million tons this year from 1.59 million in 2009, according to the May report from the Association of Natural Rubber Producing Countries.
Natural Rubber
China’s production of natural rubber may grow to 680,000 tons this year from 645,800 tons in 2009, the report said.
China’s central bank indicated it’s abandoning the 6.83 yuan peg to the dollar adopted during the global financial crisis to shield exporters. American lawmakers had argued that the yuan peg was an unfair subsidy for China’s exporters. A stronger yuan may allow policy makers the ability to stanch inflation without curbing economic growth.
“It’s a vote of confidence in Asia and in risk appetite and a reduction in the dangers of a trade war,” said Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
(bloomberg.com)
Rubber shows its elasticity as market prices bounce about
Posted: 20 Jun 2010 10:44 PM PDT
Every day thousands of new cars hit the roads in China and they all travel on rubber tires. The four wheels on your car, or the 14 wheels on the trucks hurtling between Beijing and Shandong and beyond are the most obvious evidence of the importance of the rubber industry.
This increasing demand is distorting rubber pricing in the same way that other commodity prices are also distorted. The price behavior moves beyond the simple relationship between supply and demand and is influenced by derivative price behavior.
The basics of this market are simple economics. Rubber is extracted from trees using methods, which have not changed significantly in the last 100 years.
It's labor intensive and suitable for small farmers and larger plantations. When demand is high there is a push to increase the cultivation area for rubber.
This supply lags demand because it takes around 7 years before a rubber tree starts to produce rubber but the tree continues production for around 25 years.
The alternative to natural rubber is synthetic rubber, which is a by-product of the oil industry. When oil prices are high the demand for cheaper natural rubber increases.
When oil prices are low synthetic rubber becomes cheaper and the demand for natural rubber falls. Traditionally the analysis of future rubber price movements has been closely tied to the future price of oil.
At the recent ASEAN Rubber Conference in Malaysia I examined the three features that dominate the rubber 2010 outlook. The first feature is market and trend volatility and trend divergence. The second is currency volatility.
The third is the recent confirmation of a head and shoulders pattern in the Japanese Tokyo Commodity Exchange rubber market. This pattern is a very reliable indication of significant downtrend pressure. The first two features affect many commodity prices.
Combined, they have a substantial impact on the price objectives for rubber. They also have a very large impact on the stability and continuity of the trend. Trend instability is a feature of global financial and commodity markets after the global financial crisis.
The first feature is the divergence in price trend behavior between oil and rubber. The rubber price has continued to move strongly upwards at a time when the oil price remained relatively stable.
This is an unsustainable bubble and it leads to longer term price corrections in the rubber price as the normal oil and rubber price relationship is re-established.
This bubble is influenced by the second feature, the currency volatility in the dollar index. In the past year the behavior of the rubber price closely follows the behavior of the dollar index.
This is a new behavioral relationship. The recent trend in the dollar index is defined with a parabolic curve, which suggests a significant correction will develop. This dollar index volatility transfers to the rubber pricing. The third feature is the recent confirmation of the strong head and shoulder pattern in the Japanese rubber market. This supports the bubble analysis derived from the first two features.
The head and shoulder pattern is not as strong in the Shanghai Rubber Futures market but it gives a downside target near 19,200 yuan. The pattern is invalidated with a move above 24,500 yuan.
Commodity pricing behavior is no longer a simple matter of seasonal supply and demand. Commodity investment funds have moved into this area. They are using a variety of financial methods and derivatives to 'invest' in commodities by using futures on a long-term basis.
The development of commodity funds that use exchanged traded notes based on holding futures positions for long-term investment has an impact on the market.
This reduces the efficiency of the commodity futures markets by reducing day-to-day liquidity.
This lack of liquidity helps to create price bubbles that are not related to underlying demand and supply of the commodity.
These pricing anomalies are further exaggerated by currency volatility. Commodity traders need to develop currency-hedging skills to manage the new commodity trend instability.
The author is a well-known international financial technical analysis expert.
(english.peopledaily.com.cn)
Spot rubber rules steady
Posted: 20 Jun 2010 10:42 PM PDT
Spot rubber prices closed steady consecutively for the third day on Saturday (19 June 2010). The weekend session was comparatively inactive as the prices remained neutral lacking quantity buyers and sellers to set the trend. Sheet rubber closed flat at Rs 169 a kg though the domestic rubber futures were slightly better on the National Multi Commodity Exchange (NMCE).
The July futures for RSS 4 rose to Rs 168.01 (167.64), August to Rs 163.44 (162.71), September to Rs 158.93 (158.50) and October to Rs 157.90 (156.60) a kg on the National Multi Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); ungraded: 165 (165); ISNR 20: 151.50 (150.50) and latex 60 per cent: 120 (120).
(indiainfoline.com)
Malaysia's NR Production in April Up 8.9%
Posted: 20 Jun 2010 10:40 PM PDT
Malaysia, the world's third-largest natural rubber producer after Thailand and Indonesia, produced 54,530 metric tonnes of natural rubber in April or up 8.9% on year, according to the latest figures released by the Malaysian Department of Statistics.
Output, however, was down 22% from March due to fewer trees being tapped because smallholders wanted to keep labour cost in check. March output was at 70,318 tonnes.
Malaysia’s rubber stocks at the end of April rose 36% on year to 138,511 tonnes. Rubber imports were down 4% to 49,342 tonnes while exports were up 50% to 68,452 tons. Latex concentrate, the main material in the glove industry, and standard rubber made up 52% and 28% of imports, respectively.
Dometis rubber consumption rose 0.7% on year to 37,603 tons, of which around 68% was in the glove industry.
(irco.biz)
Kochi, June 21
Select grades of rubber ended slightly higher on Monday on tight supply due to sellers holding back stocks hoping for further rise in prices, dealers said.
According to the Rubber Board, the benchmark RSS-4 grade inched up to Rs 170.50 a kg in Kottayam compared with the previous closing price of Rs 170.
In Kochi, the grade closed at Rs 170.25 a kg, it said. Firm trends in key Asian markets such as Tokyo may help the commodity to trade up on Tuesday, dealers said.
On NMCE, rubber futures were range-bound before ending with slight gains amid subdued demand, traders said. The active July contract, which hit an intra-day high of Rs 16,899 for 100 kg, settled at Rs 16,848 , up Rs 47, while the August settlement rose to Rs 16,350 compared with Rs 16,344 on Saturday.
In the Tokyo Commodity Exchange, rubber futures traded up on renewed demand during the day session as the benchmark November settlement rose to ¥282.6 a kg (Rs 141.58) from ¥274.4 while, the June contract inched up to ¥355.1 from ¥354 on Friday.
In Bangkok, RSS-3 grade, equivalent of the RSS-4 grade here, declined to Rs 166.72 a kg from Rs 168.64, according to the Rubber Board's data. In Kottayam, latex price largely declined to Rs 118.50 a kg from Rs 121 in the previous session. — © NewsWire18 Pvt. Ltd. 2010
Toyota, Honda Raise China Wages as Yuan's Flexibility to Threaten Profits
Posted: 20 Jun 2010 10:47 PM PDT
Toyota Motor Corp. and Honda Motor Co. suppliers sacrificed earnings in China by raising wages to end strikes, and the government’s decision to allow greater exchange-rate flexibility may slow plans to export vehicles from the nation if the move leads to an appreciation of the currency.
China’s central bank will allow the yuan more flexibility, it said in a statement on June 19, signaling an end to the currency’s two-year-old peg to the dollar.
The looser currency stance comes “on the back of all these moves to endorse the wage increases,” Jim O’Neill, Goldman Sachs Group Inc.’s chief global economist, said in a Bloomberg Television interview yesterday. “It’s all part of moving to the consumer, more domestic-demand-driven economy.”
Labor unrest that disrupted output at Toyota and Honda’s plants in China in the past month forced their suppliers in the country to increase wages. In addition to the higher labor costs, an appreciation of the yuan may hamper plans to export Chinese- made vehicles by carmakers including Honda, which operates an export-only factory in Guangzhou, Guangdong province.
“Honda probably has to have second thoughts on its export plant,” Koji Endo, managing director at Advanced Research Japan, said today in a Bloomberg Television interview.
Toyota, Japan’s biggest automaker, rose 2.3 percent as of the 11 a.m. midday break in Tokyo trading, while Honda, the second-largest, gained 3.5 percent. Nissan Motor Co., Japan’s third-largest carmaker, advanced 3 percent.
Chinese Export Goal
The Chinese government aims to boost exports of vehicles and parts to $85 billion by 2015 from at least $19 billion last year and the equivalent of 10 percent of the global auto trade by 2020.
Japanese carmakers won’t change plans to build vehicles in China for the domestic market, in part because of import duties, Endo said.
“China will continue to be the biggest car market in the world, and the growth rate will continue to be strong,” he said.
A stronger Chinese currency will help contain inflation, which may reduce worker wage demands, David Cohen, director for economic forecasting at Singapore-based Action Economics, said in a telephone interview yesterday.
Japanese carmakers and other foreign manufacturers including Taiwan’s Foxconn Technology Group, are spending more on labor as a result of recent unrest. Foxconn, which makes iPhones for Apple Inc., said it will double salaries for its lowest-paid workers after at least 10 Chinese employees killed themselves this year.
Toyota Supplier Strike
Toyoda Gosei Co., an affiliate of Toyota, ended a strike on June 19 that had disrupted car assembly, said Mieko Iwasaki, a Tokyo-based spokeswoman for Toyota. The company’s car plants in China are operating normally today, she said.
Akemi Ando, a spokeswoman for Honda, said the Tokyo-based company’s Chinese factories were also running as usual.
Iwasaki and Ando both declined to comment on the yuan decision’s impact on the companies.
Higher investment and improved wages in western China are deterring workers from migrating, pushing up pay in more industrialized regions like Guangdong in the south, said David Abrahamson, project manager at the China Center for Labor and Environment.
Minimum Wages
More than 20 Chinese provinces and cities raised minimum wages this year, the Shenzhen city government said on its website. In Shenzhen, which raised minimum wages an average of 15.8 percent, the government said higher pay will help companies recruit workers and will boost consumption.
Honda Lock (Guangdong) Co. ended a strike after employees at the Honda supplier agreed on June 18 to accept wage increases, said Takayuki Fujii, a Beijing-based spokesman for the carmaker. He declined to comment on the raise. Workers at the Zhongshan, Guangdong province, plant began their walkout on June 9 and suspended industrial action five days later as union leaders and management negotiated pay raises.
Honda ended the first strike at an affiliate on June 3 after agreeing to a 24 percent wage increase.
The fourth Honda affiliate to be hit by a walkout in the region, Nihon Plast Co., agreed to raise wages on June 19, Mutsuo Suzuki, a spokesman for the Shizuoka, Japan-based parts maker, said by phone today.
Nihon Plast
The pay increase was smaller than workers had demanded, Suzuki said, declining to specify further. The plant lost a day and a half of production before resuming output late on June 18, he said.
Nihon Plast is 21 percent owned by Honda, according to data compiled by Bloomberg. The company also supplies parts to Nissan and Suzuki Motor Corp., according to its website.
The Zhongshan factory, a joint venture between Nihon Plast and Osaka, Japan-based Itochu Corp., makes steering wheels for all models produced at Nissan’s Chinese venture, Dongfeng Nissan Passenger Vehicle Co. Mitsuru Yonekawa, a spokesman at Nissan, said the Yokohama-based company’s car production in China wasn’t affected by the Nihon Plast strike.
Workers at another Toyota supplier in China, Tianjin Star Light Rubber and Plastic Co., also walked out briefly on June 15. The issue was resolved when the company offered a pay increase.
Chongqing Brewery Co.’s operations returned to normal on the evening of June 18 after workers ended a strike, the Shanghai Securities News reported today, citing an unidentified company official.
(bloomberg.com)
Rubber Advances as China's Signal on 2-Year Yuan Peg May Boost Imports
Posted: 20 Jun 2010 10:45 PM PDT
Rubber climbed for the first day in three after China signaled it will unshackle the yuan’s fixed rate to the dollar, stoking speculation the world’s largest consumer may boost imports of the commodity.
Futures in Tokyo climbed as much as 2.2 percent, extending last week’s 3.6 percent increase. The price reached a two-week high of 286.7 yen on June 16 amid optimism that Europe’s sovereign-debt crisis may not stall global recovery.
The People’s Bank of China said on June 19 it may allow the yuan to move higher, making imports more affordable to buyers in the world’s third-largest economy. Asian shares and commodities surged while the dollar weakened against major counterparts as China’s move boosted investor confidence.
“A stronger yuan would encourage Chinese tire makers to increase rubber purchases from overseas to cut costs,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone.
November-delivery rubber gained as much as 6 yen to 280.4 yen per kilogram ($3,090 a metric ton) before trading at 280.2 yen on the Tokyo Commodity Exchange at 12:42 p.m.
November-delivery rubber on the Shanghai Futures Exchange added 2.3 percent to 21,695 yuan ($3,184) a ton. Earlier, the price increased to 21,735 yuan, the highest level since June 17.
China, the world’s largest auto market, is also the biggest user of natural rubber. The nation may boost gross imports of the raw material to 1.68 million tons this year from 1.59 million in 2009, according to the May report from the Association of Natural Rubber Producing Countries.
Natural Rubber
China’s production of natural rubber may grow to 680,000 tons this year from 645,800 tons in 2009, the report said.
China’s central bank indicated it’s abandoning the 6.83 yuan peg to the dollar adopted during the global financial crisis to shield exporters. American lawmakers had argued that the yuan peg was an unfair subsidy for China’s exporters. A stronger yuan may allow policy makers the ability to stanch inflation without curbing economic growth.
“It’s a vote of confidence in Asia and in risk appetite and a reduction in the dangers of a trade war,” said Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney.
Global rubber output may total 9.7 million to 10.2 million tons this year as drought and heavy rainfall in key producing countries including Thailand and Indonesia damage supply, Stephen Evans, the secretary-general of the International Rubber Study Group, said in an interview last week. That compares with the group’s forecast range of 10.1 million to 10.6 million tons on March 17.
Demand will probably increase by 4.4 percent this year to 9.8 million tons, based on the assumption that the economic recovery will slow, Evans said. The group forecast 10.2 million tons in March.
(bloomberg.com)
Rubber shows its elasticity as market prices bounce about
Posted: 20 Jun 2010 10:44 PM PDT
Every day thousands of new cars hit the roads in China and they all travel on rubber tires. The four wheels on your car, or the 14 wheels on the trucks hurtling between Beijing and Shandong and beyond are the most obvious evidence of the importance of the rubber industry.
This increasing demand is distorting rubber pricing in the same way that other commodity prices are also distorted. The price behavior moves beyond the simple relationship between supply and demand and is influenced by derivative price behavior.
The basics of this market are simple economics. Rubber is extracted from trees using methods, which have not changed significantly in the last 100 years.
It's labor intensive and suitable for small farmers and larger plantations. When demand is high there is a push to increase the cultivation area for rubber.
This supply lags demand because it takes around 7 years before a rubber tree starts to produce rubber but the tree continues production for around 25 years.
The alternative to natural rubber is synthetic rubber, which is a by-product of the oil industry. When oil prices are high the demand for cheaper natural rubber increases.
When oil prices are low synthetic rubber becomes cheaper and the demand for natural rubber falls. Traditionally the analysis of future rubber price movements has been closely tied to the future price of oil.
At the recent ASEAN Rubber Conference in Malaysia I examined the three features that dominate the rubber 2010 outlook. The first feature is market and trend volatility and trend divergence. The second is currency volatility.
The third is the recent confirmation of a head and shoulders pattern in the Japanese Tokyo Commodity Exchange rubber market. This pattern is a very reliable indication of significant downtrend pressure. The first two features affect many commodity prices.
Combined, they have a substantial impact on the price objectives for rubber. They also have a very large impact on the stability and continuity of the trend. Trend instability is a feature of global financial and commodity markets after the global financial crisis.
The first feature is the divergence in price trend behavior between oil and rubber. The rubber price has continued to move strongly upwards at a time when the oil price remained relatively stable.
This is an unsustainable bubble and it leads to longer term price corrections in the rubber price as the normal oil and rubber price relationship is re-established.
This bubble is influenced by the second feature, the currency volatility in the dollar index. In the past year the behavior of the rubber price closely follows the behavior of the dollar index.
This is a new behavioral relationship. The recent trend in the dollar index is defined with a parabolic curve, which suggests a significant correction will develop. This dollar index volatility transfers to the rubber pricing. The third feature is the recent confirmation of the strong head and shoulder pattern in the Japanese rubber market. This supports the bubble analysis derived from the first two features.
The head and shoulder pattern is not as strong in the Shanghai Rubber Futures market but it gives a downside target near 19,200 yuan. The pattern is invalidated with a move above 24,500 yuan.
Commodity pricing behavior is no longer a simple matter of seasonal supply and demand. Commodity investment funds have moved into this area. They are using a variety of financial methods and derivatives to 'invest' in commodities by using futures on a long-term basis.
The development of commodity funds that use exchanged traded notes based on holding futures positions for long-term investment has an impact on the market.
This reduces the efficiency of the commodity futures markets by reducing day-to-day liquidity.
This lack of liquidity helps to create price bubbles that are not related to underlying demand and supply of the commodity.
These pricing anomalies are further exaggerated by currency volatility. Commodity traders need to develop currency-hedging skills to manage the new commodity trend instability.
The author is a well-known international financial technical analysis expert.
(english.peopledaily.com.cn)
Spot rubber rules steady
Posted: 20 Jun 2010 10:42 PM PDT
Spot rubber prices closed steady consecutively for the third day on Saturday (19 June 2010). The weekend session was comparatively inactive as the prices remained neutral lacking quantity buyers and sellers to set the trend. Sheet rubber closed flat at Rs 169 a kg though the domestic rubber futures were slightly better on the National Multi Commodity Exchange (NMCE).
The July futures for RSS 4 rose to Rs 168.01 (167.64), August to Rs 163.44 (162.71), September to Rs 158.93 (158.50) and October to Rs 157.90 (156.60) a kg on the National Multi Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); ungraded: 165 (165); ISNR 20: 151.50 (150.50) and latex 60 per cent: 120 (120).
(indiainfoline.com)
Malaysia's NR Production in April Up 8.9%
Posted: 20 Jun 2010 10:40 PM PDT
Malaysia, the world's third-largest natural rubber producer after Thailand and Indonesia, produced 54,530 metric tonnes of natural rubber in April or up 8.9% on year, according to the latest figures released by the Malaysian Department of Statistics.
Output, however, was down 22% from March due to fewer trees being tapped because smallholders wanted to keep labour cost in check. March output was at 70,318 tonnes.
Malaysia’s rubber stocks at the end of April rose 36% on year to 138,511 tonnes. Rubber imports were down 4% to 49,342 tonnes while exports were up 50% to 68,452 tons. Latex concentrate, the main material in the glove industry, and standard rubber made up 52% and 28% of imports, respectively.
Dometis rubber consumption rose 0.7% on year to 37,603 tons, of which around 68% was in the glove industry.
(irco.biz)
Monday, June 21, 2010
Spot rubber rules steady
Spot rubber rules steady
Aravindan
Kottayam, June 19
Spot rubber prices closed steady consecutively for the third day on Saturday. The weekend session was comparatively inactive as the prices remained neutral lacking quantity buyers and sellers to set the trend.
Sheet rubber closed flat at Rs 169 a kg though the domestic rubber futures were slightly better on the National Multi Commodity Exchange (NMCE).
The July series improved to Rs 168.01 (167.64), August to Rs 163.44 (162.71), September to Rs 158.93 (158.50) and October to Rs 157.90 (156.60) a kg for RSS 4 on the NMCE.
Spot rates (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); Ungraded: 165 (165); ISNR 20: 150.50 (150.50) and Latex 60 per cent: 120 (120).
Aravindan
Kottayam, June 19
Spot rubber prices closed steady consecutively for the third day on Saturday. The weekend session was comparatively inactive as the prices remained neutral lacking quantity buyers and sellers to set the trend.
Sheet rubber closed flat at Rs 169 a kg though the domestic rubber futures were slightly better on the National Multi Commodity Exchange (NMCE).
The July series improved to Rs 168.01 (167.64), August to Rs 163.44 (162.71), September to Rs 158.93 (158.50) and October to Rs 157.90 (156.60) a kg for RSS 4 on the NMCE.
Spot rates (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); Ungraded: 165 (165); ISNR 20: 150.50 (150.50) and Latex 60 per cent: 120 (120).
Saturday, June 19, 2010
Spot rubber prices rule steady
Spot rubber prices rule steady
Kottayam, June 18
Spot rubber continued to rule steady on Friday.
The market lost its direction as reports from the domestic and international futures were not favourable. The absence of genuine buyers and quantity sellers kept the commodity almost neutral and sheet rubber finished steady at Rs 169 a kg amidst scattered transactions.
Futures weaken
The July futures weakened to Rs 167.50 (Rs 168.59); August to Rs 162.65 (Rs 164.12) and September to Rs 158.50 (Rs 159.76), while the October series improved marginally to Rs 156.60 (Rs 156.55) a kg for RSS 4 on National Multi Commodity Exchange.
The June futures for RSS 3 closed at ¥354.0/ Rs 180.26 (¥353.5); July at ¥342.0 (¥342.6); August at ¥322.7 (¥322.6); September at ¥301.1 (¥ 301.2); October at ¥281.3 (¥281.9) and November at ¥274.4 (¥275.3) a kg during the day session on Tokyo Commodity Exchange.
The June futures for the grade finished unchanged at ¥354.0 while the July futures slipped to ¥340, August to ¥321.5; September to ¥ 300.0; October to ¥279.9 and November to ¥272.8 a kg on late trades. RSS 3 (spot) increased marginally to Rs 168.64 (Rs 168.20) a kg at Bangkok.
The physical rubber prices a kg are RSS-4: Rs 169.50 (Rs 169.50) RSS-5: Rs 167 (Rs 167) Ungraded: Rs 165.00 (Rs 165); ISNR 20: Rs 150.50 (Rs 150.50) and latex 60 per cent: Rs 120 (Rs 120).
Sri Lanka seeks to raise rubber output with rain guards
Posted: 17 Jun 2010 11:22 PM PDT
Sri Lanka is to encourage small farmers tapping rubber to use rain guards to reduce production disruption by rain and provide more supplies for industry helped by high prices, an official said.
Plantations industries minister Mahinda Samarasinghe said that in some parts of the island lashed by heavy rains recently tappers were able to tap trees for only five days a month, sharply reducing output.
Rubber estates run by government research institutes which used rain guards were able to make good profits, he said.
"So we want to make rain guards more available, especially to encourage rubber small holders to use them," he told a news conference.
"Then we can increase rubber production, raise farmer incomes while ensuring enough supplies are available for industry."
About 72,000 small farmers cultivate rubber on 33,000 hectares in the island while listed plantations companies cultivate another 50,000 hectares.
Samarasinghe said even among the plantations firms use of rain guards was inadequate.
Sri Lanka's total rubber production is now around 130,000 tonnes and the country is estimated to need 150,000 tonnes by 2015, Samarasinghe said.
Small farmers are likely to be the main suppliers of rubber in future, he said.
Local consumption of rubber by industry has risen sharply in recent years.
In 1980 only 10 percent of rubber was used locally.
Today 80 percent of production is used by local industries which have had to cope with record prices in recent month owing to global shortages and rising demand..
(lankabusinessonline.com)
Malaysian Rubber Output Likely To Increase 17%: Malaysian Rubber Board
Posted: 17 Jun 2010 11:21 PM PDT
Capital Market / 14:59 , Jun 17, 2010
Natural rubber output in Malaysia, the world's third- largest grower, may surge 17 percent this year as rising prices prompt farmers to increase tapping, offsetting crop damage from drought, the Malaysian Rubber Board said.
Natural rubber production this year may climb to as much as 1 million metric tons, Salmiah Ahmad, director general of the Malaysian board, said. That is more than the 900,000 tons forecast by the nation's Plantation Industries and Commodities Ministry in May. Output last year was 856,189 tons.
Price Movement:
Rubber declined for the first time in six days as a stronger Japanese currency reduced the appeal of yen-denominated contracts and output in major producing countries increased. Futures in Tokyo dropped after reaching a two-week high yesterday. The yen advanced amid concern that Europe's debt crisis will impair the region's economic recovery, boosting demand for Japan's currency as a refuge.
(indiainfoline.com)
Spot rubber ends steady
Posted: 17 Jun 2010 11:20 PM PDT
The spot rubber prices ended steady on Thursday (17 June 2010). The market activities almost hit the bottom line as the traders were mostly reluctant to enlarge their commitments. Sheet rubber ended flat at Rs 169 per kg amidst extremely thin volumes.
The July futures for RSS 4 declined to Rs 168.52 (166.00), August to Rs 164.25 (160.95), September to Rs 159.93 (156.75) and October to Rs 156.55 (154.97) per kg on the National Multi Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); ungraded: 165 (165); ISNR 20: 150.50 (150.50) and latex 60 per cent: 120 (120).
Rubber Producers Can Team up to Stabilize Price, Minister Says
Posted: 17 Jun 2010 11:29 PM PDT
By Supunnabul Suwannakij
June 18 (Bloomberg) - Key producers of natural rubber in Southeast Asia should establish a regional rubber market to minimize the impacts of “excessive speculation” on prices, a Malaysian government official said.
“With excessive speculation, it’s timely for major producing countries including Thailand, Indonesia and Malysia to consider setting up an Asean regional rubber market to stabilize rubber prices guided by supply and demand,” said Hamzah Zainudin, deputy minister of Plantation Industries and Commodities, in a speech at a conference in Kuala Lumpur today.
(bloomberg.com)
Rubber Demand, Output May Miss Forecast on Crisis, Bad Weather
Posted: 17 Jun 2010 11:28 PM PDT
By Supunnabul Suwannakij
June 18 (Bloomberg) -- Rubber consumption this year may be slower than earlier estimated as Europe’s debt crisis likely slows the global economic recovery and adverse weather curbs production, the International Rubber Study Group said.
Demand will probably increase by 4.4 percent this year to 9.8 million metric tons, based on the assumption that the economic recovery will slow, Stephen Evans, the group’s secretary-general, said in an interview. That’s lower than the group’s March forecast of 10.2 million tons.
“Demand certainly continues but the pace will depend on the European sovereign debt position,” Evans said in Kuala Lumpur. “We’re not bullish on production because of weather impacts.”
Drought caused by the El Nino weather phenomenon, which parches crops in Asia, coupled with a concern over wet weather caused by La Nina during the dry season in Indonesia, the second-biggest producer, will likely limit production growth this year, Evans said.
Global output may total 9.7 million to 10.2 million tons this year as drought and heavy rains in key producing countries curbs supply, Evans said. That compares with the group’s forecast of 10.1 million to 10.6 million tons on March 17.
Rubber futures in Tokyo have slumped about 19 percent since reaching a 21-month high on April 16 on concerns that the European debt crisis will weaken demand for the commodity used in tires. Prices had surged on optimism that economic expansion in Asia and record auto production in China, the biggest vehicle market, would drive consumption.
La Nina
November-delivery rubber was little changed at 275.2 yen a kilogram ($3,027 a metric ton) at 12:19 p.m. local time on the Tokyo Commodity Exchange today after losing as much as 1.1 percent earlier.
La Nina conditions are increasingly likely to develop this year, Australia’s Bureau of Meteorology said on June 9. La Nina, which causes wetter-than-usual weather in Asia, can benefit or damage crops depending on the severity of the preceding El Nino event.
“Unfavorable weather will have a negative influence on supply” in June and July, supporting prices, Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries said in an interview yesterday. “June is supposed to be a dry month for Indonesia and India but the monsoon is going on there, disrupting tapping.”
Still, “prices may slide to 220 yen a kilogram around September to October, according to technical signals,” said Zbigwiew Tan, trading representative at commodity broker Okachi (Malaysia) Sdn Bhd. Prices will be pressured by the European debt crisis, which may eventually spill over to the U.S. and China markets, Tan said.
China Demand
“Europe remains depressed,” said Evans. “But we are less concerned about China as demand is still growing.”
China’s automobile output this year may grow by as much as 15 percent, expanding from a record, to 15 million units, Gu Xianghua, deputy general secretary of the China Association of Automobile Manufacturers said May 29. Vehicle sales surged 46 percent to 13.6 million units last year, overtaking the U.S. as the world’s biggest auto market.
Robust consumption from China, India, Southeast Asia and Brazil will probably boost demand growth this year by 12.6 percent to 10.6 million tons, said Prachaya Jumpasut, managing director of London-based consultancy company The Rubber Economist. That would lead to a supply deficit of around 476,000 tons this year, he said.
The supply-and-demand situation will be “largely balanced,” said Evans. Consumption may rise from as much as 10.7 million tons next year to as high as 14.2 million tons in 2020. Production next year may reach 10.7 million tons, climbing to 14.2 million to 14.3 million tons in 2020, he said.
(bloomberg.com)
Rubber Prices to Stabilize at $3 a Kilo, Group Says
Posted: 17 Jun 2010 11:28 PM PDT
By Supunnabul Suwannakij
June 18 (Bloomberg) -- Rubber prices in the top three producing countries will probably “steady” for the next two months, supported by strong demand and supply “tightness,” according to the International Rubber Consortium Ltd.
“Prices should be steady around $3 a kilogram through the next two months,” Abdul Rasip Latiff, chief executive officer of the consortium, which represents growers and exporters in Thailand, Indonesia and Malaysia, said in an interview today.
“The European crisis may slow the economic recovery, but the demand is still there. Auto sales and tire sales are still up,” he said.
Supply has not improved as much as expected after the annual February-to-April low-production period because dry weather has reduced latex output, he said.
“There is tightness in supply, especially from Thailand and northern Malaysia,” Rasip said.
China’s automobile output this year may grow by as much as 15 percent, expanding from a record to 15 million units, Gu Xianghua, deputy general secretary of the China Association of Automobile Manufacturers said May 29. Vehicle sales surged 46 percent to 13.6 million units last year, overtaking the U.S. as the world’s biggest auto market, fueling demand for the commodity used to make tires.
Key rubber producers in Southeast Asia should establish a regional market to minimize the impacts of “excessive speculation” on prices, Hamzah Zainudin, Malaysia’s deputy minister of Plantation Industries and Commodities, said in a speech in Kuala Lumpur today.
Market ‘Timely’
“With excessive speculation, it’s timely for major producing countries including Thailand, Indonesia and Malaysia to consider setting up an Asean regional rubber market to stabilize rubber prices, guided by supply and demand,” he said.
Rubber futures in Tokyo have slumped about 19 percent since advancing to a 21-month high on April 16 on optimism that economic expansion in Asia and record auto production in China will drive demand.
November-delivery rubber was little changed at 275.2 yen a kilogram ($3,027 a metric ton) at 12:19 p.m. local time on the Tokyo Commodity Exchange today after losing as much as 1.1 percent earlier.
(bloomberg.com)
Kottayam, June 18
Spot rubber continued to rule steady on Friday.
The market lost its direction as reports from the domestic and international futures were not favourable. The absence of genuine buyers and quantity sellers kept the commodity almost neutral and sheet rubber finished steady at Rs 169 a kg amidst scattered transactions.
Futures weaken
The July futures weakened to Rs 167.50 (Rs 168.59); August to Rs 162.65 (Rs 164.12) and September to Rs 158.50 (Rs 159.76), while the October series improved marginally to Rs 156.60 (Rs 156.55) a kg for RSS 4 on National Multi Commodity Exchange.
The June futures for RSS 3 closed at ¥354.0/ Rs 180.26 (¥353.5); July at ¥342.0 (¥342.6); August at ¥322.7 (¥322.6); September at ¥301.1 (¥ 301.2); October at ¥281.3 (¥281.9) and November at ¥274.4 (¥275.3) a kg during the day session on Tokyo Commodity Exchange.
The June futures for the grade finished unchanged at ¥354.0 while the July futures slipped to ¥340, August to ¥321.5; September to ¥ 300.0; October to ¥279.9 and November to ¥272.8 a kg on late trades. RSS 3 (spot) increased marginally to Rs 168.64 (Rs 168.20) a kg at Bangkok.
The physical rubber prices a kg are RSS-4: Rs 169.50 (Rs 169.50) RSS-5: Rs 167 (Rs 167) Ungraded: Rs 165.00 (Rs 165); ISNR 20: Rs 150.50 (Rs 150.50) and latex 60 per cent: Rs 120 (Rs 120).
Sri Lanka seeks to raise rubber output with rain guards
Posted: 17 Jun 2010 11:22 PM PDT
Sri Lanka is to encourage small farmers tapping rubber to use rain guards to reduce production disruption by rain and provide more supplies for industry helped by high prices, an official said.
Plantations industries minister Mahinda Samarasinghe said that in some parts of the island lashed by heavy rains recently tappers were able to tap trees for only five days a month, sharply reducing output.
Rubber estates run by government research institutes which used rain guards were able to make good profits, he said.
"So we want to make rain guards more available, especially to encourage rubber small holders to use them," he told a news conference.
"Then we can increase rubber production, raise farmer incomes while ensuring enough supplies are available for industry."
About 72,000 small farmers cultivate rubber on 33,000 hectares in the island while listed plantations companies cultivate another 50,000 hectares.
Samarasinghe said even among the plantations firms use of rain guards was inadequate.
Sri Lanka's total rubber production is now around 130,000 tonnes and the country is estimated to need 150,000 tonnes by 2015, Samarasinghe said.
Small farmers are likely to be the main suppliers of rubber in future, he said.
Local consumption of rubber by industry has risen sharply in recent years.
In 1980 only 10 percent of rubber was used locally.
Today 80 percent of production is used by local industries which have had to cope with record prices in recent month owing to global shortages and rising demand..
(lankabusinessonline.com)
Malaysian Rubber Output Likely To Increase 17%: Malaysian Rubber Board
Posted: 17 Jun 2010 11:21 PM PDT
Capital Market / 14:59 , Jun 17, 2010
Natural rubber output in Malaysia, the world's third- largest grower, may surge 17 percent this year as rising prices prompt farmers to increase tapping, offsetting crop damage from drought, the Malaysian Rubber Board said.
Natural rubber production this year may climb to as much as 1 million metric tons, Salmiah Ahmad, director general of the Malaysian board, said. That is more than the 900,000 tons forecast by the nation's Plantation Industries and Commodities Ministry in May. Output last year was 856,189 tons.
Price Movement:
Rubber declined for the first time in six days as a stronger Japanese currency reduced the appeal of yen-denominated contracts and output in major producing countries increased. Futures in Tokyo dropped after reaching a two-week high yesterday. The yen advanced amid concern that Europe's debt crisis will impair the region's economic recovery, boosting demand for Japan's currency as a refuge.
(indiainfoline.com)
Spot rubber ends steady
Posted: 17 Jun 2010 11:20 PM PDT
The spot rubber prices ended steady on Thursday (17 June 2010). The market activities almost hit the bottom line as the traders were mostly reluctant to enlarge their commitments. Sheet rubber ended flat at Rs 169 per kg amidst extremely thin volumes.
The July futures for RSS 4 declined to Rs 168.52 (166.00), August to Rs 164.25 (160.95), September to Rs 159.93 (156.75) and October to Rs 156.55 (154.97) per kg on the National Multi Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); ungraded: 165 (165); ISNR 20: 150.50 (150.50) and latex 60 per cent: 120 (120).
Rubber Producers Can Team up to Stabilize Price, Minister Says
Posted: 17 Jun 2010 11:29 PM PDT
By Supunnabul Suwannakij
June 18 (Bloomberg) - Key producers of natural rubber in Southeast Asia should establish a regional rubber market to minimize the impacts of “excessive speculation” on prices, a Malaysian government official said.
“With excessive speculation, it’s timely for major producing countries including Thailand, Indonesia and Malysia to consider setting up an Asean regional rubber market to stabilize rubber prices guided by supply and demand,” said Hamzah Zainudin, deputy minister of Plantation Industries and Commodities, in a speech at a conference in Kuala Lumpur today.
(bloomberg.com)
Rubber Demand, Output May Miss Forecast on Crisis, Bad Weather
Posted: 17 Jun 2010 11:28 PM PDT
By Supunnabul Suwannakij
June 18 (Bloomberg) -- Rubber consumption this year may be slower than earlier estimated as Europe’s debt crisis likely slows the global economic recovery and adverse weather curbs production, the International Rubber Study Group said.
Demand will probably increase by 4.4 percent this year to 9.8 million metric tons, based on the assumption that the economic recovery will slow, Stephen Evans, the group’s secretary-general, said in an interview. That’s lower than the group’s March forecast of 10.2 million tons.
“Demand certainly continues but the pace will depend on the European sovereign debt position,” Evans said in Kuala Lumpur. “We’re not bullish on production because of weather impacts.”
Drought caused by the El Nino weather phenomenon, which parches crops in Asia, coupled with a concern over wet weather caused by La Nina during the dry season in Indonesia, the second-biggest producer, will likely limit production growth this year, Evans said.
Global output may total 9.7 million to 10.2 million tons this year as drought and heavy rains in key producing countries curbs supply, Evans said. That compares with the group’s forecast of 10.1 million to 10.6 million tons on March 17.
Rubber futures in Tokyo have slumped about 19 percent since reaching a 21-month high on April 16 on concerns that the European debt crisis will weaken demand for the commodity used in tires. Prices had surged on optimism that economic expansion in Asia and record auto production in China, the biggest vehicle market, would drive consumption.
La Nina
November-delivery rubber was little changed at 275.2 yen a kilogram ($3,027 a metric ton) at 12:19 p.m. local time on the Tokyo Commodity Exchange today after losing as much as 1.1 percent earlier.
La Nina conditions are increasingly likely to develop this year, Australia’s Bureau of Meteorology said on June 9. La Nina, which causes wetter-than-usual weather in Asia, can benefit or damage crops depending on the severity of the preceding El Nino event.
“Unfavorable weather will have a negative influence on supply” in June and July, supporting prices, Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries said in an interview yesterday. “June is supposed to be a dry month for Indonesia and India but the monsoon is going on there, disrupting tapping.”
Still, “prices may slide to 220 yen a kilogram around September to October, according to technical signals,” said Zbigwiew Tan, trading representative at commodity broker Okachi (Malaysia) Sdn Bhd. Prices will be pressured by the European debt crisis, which may eventually spill over to the U.S. and China markets, Tan said.
China Demand
“Europe remains depressed,” said Evans. “But we are less concerned about China as demand is still growing.”
China’s automobile output this year may grow by as much as 15 percent, expanding from a record, to 15 million units, Gu Xianghua, deputy general secretary of the China Association of Automobile Manufacturers said May 29. Vehicle sales surged 46 percent to 13.6 million units last year, overtaking the U.S. as the world’s biggest auto market.
Robust consumption from China, India, Southeast Asia and Brazil will probably boost demand growth this year by 12.6 percent to 10.6 million tons, said Prachaya Jumpasut, managing director of London-based consultancy company The Rubber Economist. That would lead to a supply deficit of around 476,000 tons this year, he said.
The supply-and-demand situation will be “largely balanced,” said Evans. Consumption may rise from as much as 10.7 million tons next year to as high as 14.2 million tons in 2020. Production next year may reach 10.7 million tons, climbing to 14.2 million to 14.3 million tons in 2020, he said.
(bloomberg.com)
Rubber Prices to Stabilize at $3 a Kilo, Group Says
Posted: 17 Jun 2010 11:28 PM PDT
By Supunnabul Suwannakij
June 18 (Bloomberg) -- Rubber prices in the top three producing countries will probably “steady” for the next two months, supported by strong demand and supply “tightness,” according to the International Rubber Consortium Ltd.
“Prices should be steady around $3 a kilogram through the next two months,” Abdul Rasip Latiff, chief executive officer of the consortium, which represents growers and exporters in Thailand, Indonesia and Malaysia, said in an interview today.
“The European crisis may slow the economic recovery, but the demand is still there. Auto sales and tire sales are still up,” he said.
Supply has not improved as much as expected after the annual February-to-April low-production period because dry weather has reduced latex output, he said.
“There is tightness in supply, especially from Thailand and northern Malaysia,” Rasip said.
China’s automobile output this year may grow by as much as 15 percent, expanding from a record to 15 million units, Gu Xianghua, deputy general secretary of the China Association of Automobile Manufacturers said May 29. Vehicle sales surged 46 percent to 13.6 million units last year, overtaking the U.S. as the world’s biggest auto market, fueling demand for the commodity used to make tires.
Key rubber producers in Southeast Asia should establish a regional market to minimize the impacts of “excessive speculation” on prices, Hamzah Zainudin, Malaysia’s deputy minister of Plantation Industries and Commodities, said in a speech in Kuala Lumpur today.
Market ‘Timely’
“With excessive speculation, it’s timely for major producing countries including Thailand, Indonesia and Malaysia to consider setting up an Asean regional rubber market to stabilize rubber prices, guided by supply and demand,” he said.
Rubber futures in Tokyo have slumped about 19 percent since advancing to a 21-month high on April 16 on optimism that economic expansion in Asia and record auto production in China will drive demand.
November-delivery rubber was little changed at 275.2 yen a kilogram ($3,027 a metric ton) at 12:19 p.m. local time on the Tokyo Commodity Exchange today after losing as much as 1.1 percent earlier.
(bloomberg.com)
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