Rubber farmers slam demand by tyre firms for easing duty

Rubber farmers slam demand by tyre firms for easing duty
Posted: 31 May 2010 08:02 PM PDT
Thiruvananthapuram: Rubber growers have strongly criticised the tyre industry’s demand to lower the import duty on natural rubber and a ban on futures trading on the grounds that such a demand has no rational. The tyre makers had demanded lowering of the import duty and a ban on futures trading because of a over 13% rise in natural rubber prices in the last few days.

In a memorandum to Union commerce ministry this week, the growers point out that while consumer industry had imported about 1,52,000 million tonne this year, most of these were without any customs duty, availing export incentives.

India’s tyre export had grown 30% this year, the memorandum said. The end-user contends that if imports are not eased, it could impact their raw material sourcing needs. To which the rubber industry’s contention is that they (the rubber industry) are committed to increase productivity.

“All stakeholders have evolved a long-term strategy to boost productivity to meet the requirement of 15 lakh tonne of quality rubber by 2020,” Siby Monipally, general secretary, Indian Rubber Growers’ Association, also a member of the Rubber Board, told FE.

“When rubber price is up, it is the real farmer, not the intermediaries, who gain,” Monipally argued.

(economictimes.indiatimes.com)


Rubber seen steady as rains to cut supply, demand
Posted: 31 May 2010 08:07 PM PDT
MUMBAI: Indian rubber futures are likely to trade in a range this week as rains in the top producing state may cut spot supplies as well as buying by tyre makers, analysts and traders said on Monday.

Monsoon rains, vital for farm output in India's trillion-dollar economy, have hit the country's southern Kerala coast as scheduled, the chief of the weather office said on Monday. Kerala is the biggest producer of rubber in the country. "Rains have come. Obviously arrivals will go down in coming weeks. Tyre companies also cut buying in monsoon months," said Shiji Abraham, analyst with JRG Wealth Management.

"I am not expecting much volatility in prices this week." Tyre companies reduce their inventories during rains as humidity leads to fungus attacks, hurting demand during monsoon, Abraham said.

The benchmark July contract on the National Multi-Commodity Exchange (NMCE) was down 2.2 percent at 16,558 rupees per 100 kg. The contract may test support at 16,450 rupees, Abraham said. Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) eased by 100 rupees to 16,950 rupees per 100 kg in Kottayam, Kerala, Rubber Board data showed.

It rose to an all time high of 17,050 last week because of lower supplies and robust demand, and is still trading up 3,050 rupees in 2010. India's rubber production is likely to rise 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last month. Tokyo rubber futures held firm on Monday near a three-week high as crude oil firmed, while physical prices were also mostly steady.

(economictimes.indiatimes.com)



Rubber Climbs on Supply, Limited by China Manufacturing Report


June 1 (Bloomberg) -- Rubber advanced after cash prices in Thailand, the biggest exporter, climbed on low supplies. The gains were limited as China’s manufacturing expansion slowed, raising concern demand from the largest consumer may weaken.

Futures in Tokyo increased 5.2 percent in the past four days, paring a monthly drop. The price declined 2.7 percent in May amid concern Europe’s sovereign debt crisis may stall economic recovery.

Chinese manufacturing expanded at a slower pace in May, adding to signs that growth may moderate in the world’s third- biggest economy. Rubber supplies from Thailand failed to pick up after a low-production season ended, as a dry weather curbed latex output, said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo.

“The market is capped by concern about Europe’s debt problems and possible slowdown in China’s economy,” Shigemoto said today by phone. “There were no aggressive sellers as a stronger physical market boosted the price of the nearby contract in Tokyo.”

Rubber for November delivery, the most-active contract, advanced 0.2 percent to 285.7 yen per kilogram ($3,136 a metric ton) on the Tokyo Commodity Exchange at noon. Earlier the price fell as much as 0.5 percent.

June-delivery rubber on the Tokyo exchange jumped as much as 2.3 percent to 388.8 yen before trading at 383 yen.

Cash Prices

Cash prices in Thailand, the largest exporter, extended gains as increasing demand outpaced supply, the Rubber Research Institute of Thailand said on its website.

Thai RSS-3 grade rubber for June delivery added 0.8 percent to 126.40 baht ($3.89) a kilogram yesterday, according to the institute, which reviews the price once a day and issues new data in the afternoon.

China’s Purchasing Managers’ Index fell to 53.9 from 55.7 in April, seasonally adjusted, the Federation of Logistics and Purchasing said today. That was less than the median 54.5 estimate in a Bloomberg News survey of 18 economists. Readings above 50 indicate an expansion.

A government crackdown on property speculation is cooling the economy by damping sales and construction, while Europe’s sovereign-debt crisis could exacerbate a slowdown by cutting demand for exports. China’s policy makers may delay raising benchmark interest rates or letting the yuan appreciate even after the economy grew 11.9 percent in the first quarter.

September-delivery rubber on the Shanghai Futures Exchange dropped 0.2 percent to 22,790 yuan ($3,338) a ton.

(bloomberg.com)