Mixed trend in rubber

Mixed trend in rubber


Kottayam, Nov. 24

Spot rubber showed a mixed trend on Wednesday. Most of the traders were hesitant to enhance their commitments in an uncertain market possibly observing a slip in the international rates. Hence the gains were minimal though the domestic futures recovered on NMCE. The transactions were dull.

Sheet rubber improved to Rs 199.50 (199.00) a kg according to Dealers. The grade weakened further to Rs 199.50 (200.50) a kg both at Kottayam and Kochi according to Rubber Board.

Futures gain

The December series bounced back to Rs 202 (199.01), January to Rs 205.24 (202.30), February to Rs 207.44 (204.79) and March to Rs 210.50 (208.16) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).

The November futures for RSS 3 expired at ¥354.9 (Rs 194.95) while the December futures declined to ¥356.3 (Rs 195.70) from ¥368.5 during the day session and then recovered partially to ¥356.9 (Rs 196.05) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) moved down Rs 199.50 (201.30) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 199.50 (199); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (193) and latex 60 per cent: 130 (130).


Rubber Futures Decline on China's Price-Cooling Moves, Tension Over Korea
Posted: 24 Nov 2010 01:33 AM PST
Rubber declined for the first time in four days on concern that China’s measures to tame inflation may curb demand from the world’s largest user and after North Korea attacked South Korea, weakening investor risk appetite.

April-delivery rubber on the Tokyo Commodity Exchange slumped as much as 3.6 percent to 356.4 yen per kilogram ($4,283 a metric ton) before settling at 359.5 yen. It also dropped as Standard & Poor’s Ratings Services cut Ireland’s credit rating, raising concern that Europe’s debt crisis may stall the region’s economic recovery. The market was closed yesterday for a holiday.

China will crack down on the use of loan funds in speculation, hoarding and artificially inflating prices of agricultural products, the China Banking Regulatory Commission said on Nov. 22, sending rubber futures in Shanghai tumbling by the daily limit yesterday. South Korea’s stocksand currency sank after North Korea fired artillery, killing two soldiers.

“Rubber was sold as tension in Korea sapped investor appetite for risk assets,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Caution about China’s steps to curb inflation was another drag on rubber futures.”

May-delivery rubber fell as much as 2.9 percent to 31,300 yuan ($4,707) a ton before gaining 0.2 percent to close at 32,285 yuan on the Shanghai Futures Exchange. The contract reached a record 38,920 yuan on Nov. 11.

China, the biggest buyer, ordered banks on Nov. 19 to set aside larger reserves for the second time in two weeks. The move to contain excess liquidity came after Premier Wen Jiabao held a Cabinet meeting earlier in the week and called for a crackdown on speculation in agricultural goods, saying price controls may be needed on “daily necessities.”

China Controls

China’s cabinet said last week it may impose temporary price controls after inflation gained the most since September 2008 and food prices climbed 10.1 percent.

Rubber in Tokyo has climbed 32 percent this year as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.

The cash price of natural rubber in Thailand, the largest producer and exporter, fell 1.1 percent to 131.25 baht ($4.36) per kilogram today as worries over China attempt to curb inflation and Ireland debt crisis prompted investors to reduce position in agricultural contracts, according tothe Rubber Research Institute of Thailand. The downside is limited because of supply shortage from major producers, it said. Thai price yesterday reached a record 132.75 baht per kilogram.

Ireland’s debt rating was lowered two steps by Standard & Poor’s, with a negative outlook, as the nation’s bailout of its banking system is set to escalate the government’s borrowing needs. Ireland is hammering out an aid package with the EU and the International Monetary Fund to rescue its banking system.

(Source: http://www.bloomberg.com/news/2010-11-24/rubber-futures-decline-on-china-s-credit-crackdown-north-korean-attack.html)






China Rubber Futures Fall After Crackdown on Bank Credit for Speculation
Posted: 23 Nov 2010 05:29 PM PST
Natural rubber futures in Shanghai dropped by the daily 5 percent limit after the government said it would crack down on the use of bank credit to speculate in the agricultural market. Palm oil, sugar and rice also dropped.

The most-actively traded contract for May delivery fell to 32,220 yuan ($4,849) a metric ton on the Shanghai Futures Exchange. The contract has fallen more than 12 percent since Nov. 11, when China said its October consumer prices rose a more-than-forecast 4.4 percent from a year earlier, prompting the government to further tighten the monetary policy.

China will strictly crack down on the use of loan funds in speculation, hoarding and artificially inflating prices of agricultural products, the China Banking Regulatory Commission said on its website yesterday. China’s cabinet said last week it is also increasing grain supplies and may impose temporary price controls after inflation gained the most since September 2008 and food prices climbed 10.1 percent.

“The banking regulator became the latest government agency joining the crackdown on speculation in the agricultural market,” said Forrest Hu, manager at Shanghai Jinhuicheng International Trade Co.

Farm products prices have fallen in the past week since the government’s coordinated efforts to suppress speculation and increase supply by selling government stockpiles of sugar, pork and cooking oil.

Palm oil futures for September delivery on the Dalian Commodity Exchange fell 0.8 percent to 8,488 yuan a ton by the 11:30 a.m. local time break and have dropped almost 12 percent since Nov. 11. Sugar for delivery in the same month dropped 0.2 percent to 6,307 yuan and has fallen 13 percent in the same period.

Rubber also fell because of rising commercial inventories, Hu said. Natural rubber inventoriesrose for an eighth consecutive week to a seven-month high, gaining 705 tons to 60,996 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said on Nov. 19.

(Source: http://www.bloomberg.com/news/2010-11-23/china-rubber-futures-fall-after-crackdown-on-bank-credit-for-speculation.html)






Price reaction: Rubber high spurs extra planting
Posted: 23 Nov 2010 05:26 PM PST
CAMBODIA’S rubber farmers are looking to expand plantations after the price of rubber hit more than US$4,000 per tonne this month.
Yesterday, April-delivery rubber on the Tokyo Commodity Exchange climbed as much as 2.1 percent to 375.3 yen per kilogram ($4,498 a tonne). The contract has climbed 13 percent this month as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
Pouy Bun Eng, of Chamkar Leu district, in Kampong Cham province, said she expanded her 50 hectare plantation by another seven hectares last month.
“I am happy because of the current high price,” she said.
While Kampong Cham province’s Tbong Khmum Family Rubber Association President Thy Sambo said that he expected further increases in the price of resin this month. He warned, however that the crop took a long time to grow.
Ly Phalla, director of the Rubber Department at the Ministry of Agriculture, Forestry and Fisheries, said that high demand was pushing prices and the trend was set to continue.
Cambodia grows rubber on more 16.5000 hectares of land and produce more than 40,000 tonnes each year.

(Source: http://www.phnompenhpost.com/index.php/2010112344904/Business/price-reaction-rubber-high-spurs-extra-planting.html)






Tyre companies challenge Rubber Board data
Posted: 23 Nov 2010 05:25 PM PST
Tyre companies have criticised the state-run Rubber Board for inflating rubber stock position and stated that the board's claim of sitting on stocks of more than 3 lakh tonne was merely 'on paper'.

The closing stock, as reported by the Rubber Board to the Association of Natural Rubber Producing Countries(ANRPC), has been pegged at 38% of the country's total natural rubber production. Even world's largest rubber producing countries including Thailand, Malaysia and Indonesia have closing stocks at mere 7%, 14% and 3%, respectively, of their production.

“At a time when rubber prices are ruling at an all-time high and the very availability is a concern, such tall stock claims are unrealistic,” Rajiv Budhraja, director-general, Automative Tyre Manufacturers Association (ATMA) told FE.

The association is planning to send a reminder to the Centre contesting the claims made by the Rubber Board. The tyre makers had earlier lobbied for allowing imports at nil duty

to bring down the cost of production.

Based on the recently issued ANRPC statistics, tyre industry has been keeping tab on the rubber flow to the market. ATMA points out that India’s closing rubber stocks have been rising. It currently stands at a significant 31% of the total natural rubber stock of major ANRPC, while India accounts for just 9% of the total production of ANRPC. ATMA said that closing stock of China- the world’s biggest rubber consumer- is only 6% of its total consumption. But India has one third of its total consumption stockpiled as stock....

(Source: http://www.financialexpress.com/news/tyre-companies-challenge-rubber-board-data/715022/0)