Rubber supply situation seen worsening in Q4

Rubber supply situation seen worsening in Q4


Kochi, Oct. 28

While the huge demand and imports by China in October has kindled firm price trends in global rubber markets, the demand-supply situation is expected to deteriorate further during the fourth quarter, the Association of Natural Rubber Producing Countries has warned.

Demand for natural rubber in India, which cooled off in the third quarter, is expected to accelerate during the fourth quarter. However, both India and Malaysia are expected to avoid imports, given the high prices expected in global markets.

Higher imports seen

But, China which had been keeping away from imports has re-entered in a big way in October and the trend is likely to be maintained. China's natural rubber imports are expected to grow by over 40 per cent during the fourth quarter. India, China and Malaysia together account for 47 per cent of global rubber consumption.

The increased imports expected during the coming months are on the back of greater consumption during January-September. Consumption during January-September increased by 10 per cent in China, 5 per cent in India and 2.5 per cent in Malaysia. Meanwhile, global rubber production estimates are likely to slip further in the coming months: from an expected growth of 6.3 per cent to 5.3 per cent.

This is mainly because several producing countries have scaled down their production estimates. Due to the persistent and unseasonal rains in October, India has scaled down its supply growth from 7.2 per cent estimated earlier to 2.9 per cent. Similarly, due to unseasonal rains and tapping disruption, supply from Thailand is expected to fall by 3.9 per cent in Q4.

In China, a large number of trees could not be tapped in October due incessant rains in the Hainan province, which has reduced production. Chinese production could also be affected during the winter months due to extreme cold weather. Vietnam, China and Cambodia have all revised their production estimates downward.

According to figures available from the ANRPC, the sharp spurt in global spot and futures prices for rubber can be explained by not only the expected shortage in production, but also due to the appreciation in the value of currencies of producing countries such as Thailand, Malaysia and Indonesia. The strengthening of the Japanese currency and spurt in the price of crude oil are also expected to have influenced the price of rubber.

Global supply of natural rubber that was expected to grow by 5.3 per cent in 2010 is likely to be scaled down after a review next month. The possibility of marked change in supply scenario is remote in the coming year as well since the yielding area under rubber trees is unlikely to grow significantly before 2012. The concerns over natural rubber supply are likely to persist till the end of 2011, unless there is sharp downturn in demand, the ANRPC warned.




Outgoing Rubber Board chief felicitated
Kottayam, Oct. 28

The integrity and dedication of the government servants have a vital role in good governance in democracy, said Mr P.J. Kurian, MP, delivering the presidential address at the farewell meeting of Mr Sajen Peter, Chairman, Rubber Board, at Mammen Mappillai Hall, Kottayam, organised by the public and employees of the Board.

“Indian Administrative Service is not a mere machinery to execute the directions of the political leadership. Mr Sajen Peter was a role model quite exceptional who always upheld his honest and impartial ideas in administration,” he said.

Mr V.N. Vasavan, MLA, said in his felicitation that Mr Sajen Peter had put in his best efforts for branding of Indian natural rubber in the international market.

“He had always been interested in creating quality consciousness among the small holders through his regular and meaningful messages through Rubber magazine and Board's other publications,” he said.

Mr Jacob Thomas (Member, Rubber Board), Mr Siby Monippally (Member, Rubber Board), Dr James Jacob (Director, Rubber Research Institute of India), Mr Augustine Joseph Vellimoozhayil (President, Anthyalam Rubber Producers' Society), Mr P.N. Narayanan Nair (President, Rubber Board Pensioners' Association), Mr P. Achuthan Kutty (Rubber Board Extension Officers Union), Mr Moncy P. Kurian (Rubber Board Technical Officers Union), Mr E.P. Joy (Rubber Board Staff Union) and Mr Mohammed Shereef (Rubber Board Technical Guild), spoke in the meeting.



Spot rubber stays steady


Kottayam, Oct. 28

Spot rubber finished unchanged on Thursday. The sharp declines on the National Multi Commodity Exchange failed to make any impact in the physical market, possibly, on supply concerns. Among other news, heavy and unseasonal rains in key natural rubber producing countries might worsen the tight supply situation in October-December, the Association of Natural Rubber Producing Countries said. Sheet rubber closed flat at Rs 190 a kg in the main marketing centres amidst scattered transactions. The grade improved to Rs 190 from Rs 189 a kg both at Kottayam and Kochi according to Rubber Board.

Futures decline

The November series declined to Rs 192.90 (194.45), December to Rs 195.80 (197.36), January to Rs 197.80 (199.52) and February to Rs 201 (202.43) a kg for RSS 4 on the NMCE.

RSS 3 weakened at its November futures to ¥323.7 (Rs 177.22) from ¥325.8 during the day session but then recovered to ¥326 (Rs 178.43) a kg in the night session on Tokyo Commodity Exchange (TOCOM). The grade (spot) slipped to Rs 179.16 (179.61) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 190 (190); RSS-5: 180 (180); ungraded: 176 (176); ISNR 20: 186 (186) and latex 60 per cent: 123.50 (123.50).