RUBBER NEWS
Rubber prices to continue uptrend
SATURDAY, APRIL 2, 2011
The Malaysian rubber market is expected to continue its uptrend next week on a continuous tight supply expectation, dealers said.
They said floods in Thailand, coupled with the wintering season in the producer countries, would continue to support prices.
Prices are also expected to follow the movement on the Tokyo Commodity Exchange, the global trendsetter of rubber prices.
For the week just-ended, rubber prices mostly took cue from the movement on the Tokyo and Shanghai futures markets.
Tyre-grade SMR 20 lost 12 sen to 1,516.0 sen per kg from 1,528.0 sen per kg previously, while latex-in-bulk gained 26 sen to 1,068.0 sen per kg on Friday, from 1,042 sen per kg, previously. -- Bernama
NMCE Rubber settles down on extended selling
SATURDAY, APRIL 2, 2011
NMCE rubber futures traded highly volatile on Thursday. From opening itself prices started trading down on profit booking at higher levels. TOCOM futures market also extended the bearish trend on active selling and settled at ¥424.90 per Kg.
Thus, on negative cues from TOCOM prices at NMCE platform also traded down. However, domestic spot market continued the positive trend amid tight supply. Positive cues from spot market supported the prices to witness good recovery at lower levels but prices failed to sustain the gains and resumed the down trend again.
The rubbers futures are projected to continue the losses initially on active profit selling on Friday. TOCOM August futures are also trading down at ¥423.00 per Kg. on extended profit selling. However, domestic spot market is reporting good buying which might support the Indian futures to trade higher later in the day.
Factors to Watch For
As per deputy head of the China Rubber Industry Association, Natural-rubber demand in China, the biggest consumer, will rise 8% this year. Consumption will be 3.24 million metric tons, while tire output will climb 7.9 percent to an all-time high of 453 million units
As per the Committee on rubber policy of Thailand Government, Thai government will negotiate with commercial banks to extend loans to exporters to buy rubber from farmers at a minimum price of 120 baht per Kg
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE April contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend.
Japan Futures (TOCOM)
The TOCOM active August contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active July contract, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
Immediate concern is to enhance productivity of rubber, says Chairman
SATURDAY, APRIL 2, 2011
In her first interview since the assumption of office as Chairman of the Rubber Board, Ms Sheela Thomas explores new areas where more rubber could be brought under cultivation as the shortage of rubber would be a global phenomenon in the future.
Enhancing production is her first priority and she also gives equal importance to a remunerative price to the grower, equivalent to international price. She also intends to have an external evaluation of the current plan schemes. Calm and composed, she unfolds her action plans to Business Line during her tenure in Rubber Board. Excerpts from the interview:
Having taken over as the Rubber Board Chairman recently, what are your priorities?
Recent statistics show that we would face shortage of natural rubber (NR) in the country in the near future. Indications are that we will not be able to depend on imports as the shortage will be felt the world over. So our immediate concern should be increasing production of NR through large scale expansion of area and enhancing productivity.
My first priority will be this. Everybody knows that vacant land for new planting is not available in the traditional rubber growing areas of Kerala and Tamil Nadu. We have to look east and northeast. Large tracts of cultivable land have already been identified in the seven North-East States and the Board will concentrate its efforts to increase new planting in these States.
Equal priority will be given in ensuring fair price to the existing producers, on par with the international price. Also, NR has to be promoted as an environmentally friendly material. Synthetic alternatives to NR depend heavily on non-renewable petroleum feed stocks and their manufacture will contribute to global warming. Production of NR, on the other hand contributes to the health of the environment.
NR production also provides livelihood to millions of people. Equally important is the need for establishing a synergy with the NR consuming industry in the country. Production and consumption should go hand in hand, and the health of one sector is dependent on the other.
The Board will always keep in mind that a happy co-existence of all the stakeholders, like producers, processors, dealers, manufacturers and exporters, is the precondition for inclusive growth of the sector. Rubber is a long gestation crop. It takes six to seven years to reach the productive phase.
Growers, the majority of whom belong to the small and marginal categories get no income from their holdings during these years. Therefore activities to generate income from other sources should be promoted.
Already growers resort to intercropping, beekeeping, collection of rubber seeds and cover crop seeds, etc, in immature plantations. These activities are to be further strengthened. More research will be done to identify hitherto unexplored avenues for generating ancillary income.
How far have the Board's efforts for export promotion been successful?
The Indian NR sector had been, for historical reasons, evolved with an orientation for domestic market as rubber was promoted as a crop for import substitution. Till the turn of the century, India had been a net importer of NR.
But with the lifting of quantitative restrictions on import posed a serious threat to the domestic NR producing sector and export had to be promoted to neutralise the adverse effects of tactical import. To reverse the domestic orientation the market traditionally had, it was essential that our produce meet international standards in terms of quality, packaging, delivery schedule and price.
The Board took several measures right from the early 90s to strengthen the domestic NR sector and to equip it to face the challenges thrown up by the world market. The Board launched several schemes for quality upgradation of the produce and to cut production costs.
We gave financial support, not only to growers, but also processors. Short term and long term productivity enhancement schemes were introduced for growers. The processors were helped in modernising their factories to improve product quality, to cut costs, to produce more and also in switching over to systems less dependent on fossil fuels to improve packaging and presentation of the product were also extended.
This exposure to international market itself has been instrumental in enhancing the quality standards of Indian NR. The Board extends financial help to the processors to participate in international fairs and attend buyer-seller meets abroad. All these have helped Indian NR to establish its own niche in the world market.
Has the Indian NR logo helped exports?
The scheme for branding of export rubber with logo was launched very recently. Several exporters have registered for the logo and a few consignments of branded rubber have already been shipped. It is believed that the logo, which is actually a guarantee by Government of India, would increase the acceptability of Indian NR overseas.
Recently, there was a controversy about genetically modified rubber. What is the Board's stand on this?
Research in genetic modification of rubber plants is intended to develop clones which can resist climate change and also tapping panel dryness. The trials were approved by the Genetic Engineering Approval Committee (GEAC).
We applied to the State Governments of Kerala and Maharashtra for permission to start GM rubber trials in our experiment stations in these States. The Kerala Government has not yet responded to our proposal. We, intend to start the trials in Maharashtra, where we have got the green signal.
Having taken over towards the fag end of the current fiscal, you have a crucial role in formulating the forthcoming 12th Plan proposals for rubber. What do you intend to do?
The 12th Five Year Plan will be a ‘people's plan'. Starting from April, we will have a series of consultations with all the stakeholders of rubber to have their suggestions for the next Five Year Plan.
We will, early on, arrange for an external evaluation of the current plan schemes which are ending in 2011-12. A National Committee, comprising experts from different fields, headed by the world renowned agricultural scientist Dr M. S. Swaminathan, is constituted to evaluate the implementation of 11th Plan schemes and to generate inputs for the formulation of schemes for the future.
Those stakeholders who cannot personally attend the consultations can give their views online through the suggestion box provided for the purpose on the Board's Web site (www.rubberboard.org). All the suggestions we receive will be considered, subject to the guidelines fixed by the Government of India.
Indonesia rubber exports to Japan seen falling -official
SATURDAY, APRIL 2, 2011
(Reuters) - Indonesian rubber exports to Japan are expected to drop significantly in coming months as the earthquake and tsunami there last month affected the country's auto industry, a trade ministry official said on Friday.
The Indonesian Rubber Association said last week it had not heard of any cancellations or postponements of deliveries to Japan, which accounts for 7 percent of global demand for natural rubber. [ID:nL3E7EN07W]
But Deddy Saleh, director general of foreign trade at the trade ministry, said rubber consumption may drop significantly in the Japanese tyre production industries from April onwards, due to damage caused by the quake and the lack of power supply in the world's third largest economy.
Indonesian natural rubber exports to Japan in March were 31,930 tonnes, up from 28,650 tonnes in February, according to the Indonesian Statistics Agency.
Indonesia, the world's second-largest rubber producer, produced about 2.8 million tonnes of rubber in 2010.
Global demand for rubber, both natural and synthetic, is forecast to rise to 26.1 million tonnes in 2011 from 24.4 million tonnes in 2010, the International Rubber Study Group said earlier this month. [ID:nL3E7EB118]
Deddy added that the Indonesian automotive industry, which has close ties with Japanese firms that make the major brands sold in Southeast Asia's biggest economy, may also experience a lack of automotive parts.
"According to our estimation, the local automotive industry is going to have a shortage of automotive components due to their stocks only being enough for two or three months," he said. "Two or three months after the disaster there could be a problem.".
Tokyo rubber futures fall
SATURDAY, APRIL 2, 2011
Bangkok (april 02, 2011) : tokyo rubber futures fell on friday on technical selling as players liquidated contract to avoid risks ahead of the weekend after prices failed to break above a key resistance of 440.0 yen, dealers said. the benchmark september-delivery contract on the tokyo commodity exchange fell 4.8 yen, or 1.1 percent, to settle at 427.4 yen ($5.14) per kg.
the most-active shanghai rubber contract for september delivery dropped 260 yuan to finish at 34,635 yuan ($5,288) per tonne. brent crude was steady above $117, after earlier touching a four-week high, as investors awaited an expected positive us march payroll report due later on friday for clues to demand prospects by the world's largest oil importer.
the yen slid to a 10-month low against the euro and fell below its 200-day moving average versus the dollar on friday, poised for more weakness as widening yield differences increased the appeal of using the yen to fund investments in other currencies. tocom prices were likely to stay firm on limited supply in producing countries but prices were expected to be trapped in a narrow range between 420 and 440 yen per kg.
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