Tyre companies demand duty-free import of 1 lakh tonne rubber
October 25, 2011
KOCHI: Tyre manufacturers have sought duty-free import of 1 lakh tonne natural rubber as high price and weak rupee did not allow them to complete their special import quota of 40,000 tonne. Tyre companies say recent floods in Thailand and active buying by China may lead to another flareup in the global rubber prices.
The import of 40,000 tonne had been allowed by the government this fiscal year at a reduced duty of 7.5% against the normal 20% duty. Of this quota, the industry has imported around 25,000 tonne. “Higher international prices and the depreciation of rupee have prevented the industry from completing the full lot of imports,” said Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association. Now, with a falling rupee, the association is requesting the government to allow duty-free import of 1 lakh tonne.
The association has expressed its reservation on the rubber stock figures provided by the Rubber Boardand says it should be reviewed. The board is expected to come out with a revised estimate by the end of November. The board estimate for the stock at the end of September 2011 is 2,79,477 tonne, which some traders feel is a tad high.
International rubber prices dropped to Rs 195.72 per kg last Friday, a fall of Rs 6 from the previous day. Though there is no trading in Bangkok on Monday, Tokyo and Shanghai futures have moved up on positive reports on a resolution to Europe’s debt worries. Floods in Thailand, the biggest rubber producer, have not affected rubber plantations but some car factories in the country have stopped production, which could affect the demand.
Though local production has gone up over the last one month, growers are reluctant to sell in anticipation of a better price. “There were continuous tapping during the last one month but not much selling. Demand has not rebounded as the original equipment market still down while the replacement tyre segment has not been able to compensate for this,” said George Valy, president of Rubber Dealers Association.
Market on Oct 27: Spot rubber improves on supply concerns
October 27, 2011
KOTTAYAM, OCT. 27:
Physical rubber prices improved on Thursday. The market improved following sharp gains in domestic futures, coupled with supply concerns amid widespread North-East monsoon rain.
Reports from international markets were also positive. Sheet rubber improved to Rs 212 (211) a kg both at Kottayam and Kochi, according to traders and the Rubber Board. The trend was mixed.
The country rubber consumption is expected to slow down this year to 0.9 per cent from 4.3 per cent last year. It mainly originates from the general-rubber-goods sector which has been hit by a series of hikes in interest rate and energy prices, apart from rise in other input costs.
Figures available from Automotive Tyre Manufacturers’ Association (ATMA) revealed a five per cent annual rise in production of heavy commercial vehicle tyres during the five-months ended August against nine per cent for passenger car tyres and 23 per cent for light commercial vehicle tyres. An estimated 60 per cent of the country’s total demand for rubber comes from auto-tyre manufacturing industry that closely tracks economic trends.
In futures, the November series rebounded to Rs 215.01 (210.12), December to Rs 215.05 (209), January to Rs 216.15 (209.97), February to Rs 217 (211.16) and April to Rs 221.75 (217.48) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) moved up to Rs 195.88 (194.21) a kg at Bangkok. The November futures increased to ¥296.6 (Rs 192.91) from ¥288.8 a kg during the day session and then ¥302.6 (Rs 196.82) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 212 (211); RSS-5: 210 (209); ungraded: 202 (202); ISNR 20: 200 (200) and latex 60 per cent: 128.50 (128.50).
Friday, October 28, 2011
Saturday, October 22, 2011
Northeast emerging as rubber hub
Northeast emerging as rubber hub
October 21, 2011
GUWAHATI, OCT 21:
The North-East is emerging as the rubber hub of India as experts believe that large-scale cultivation of the crop can bridge the shortfall in supply amid rising demand.
Traditionally, rubber is grown in the southern states of Kerala and Tamil Nadu, but an increase in demand for the crop has resulted in a search for other regions where cultivation can be pursued.
Rubber planting has not expanded to the desired extent in Karnataka, Andhra Pradesh, Goa, Maharashtra and Orissa, where climatic conditions support their growth.
“We believe that now we have to look to the North-East to produce more natural rubber,” Mr K.G. Mohanan, Additional Rubber Production Commissioner of the Rubber Board, said.
A search was launched and it culminated in attempts by the board to grow rubber in Assam, Tripura, Meghalaya, Mizoram, Manipur, Nagaland and Arunachal Pradesh, he said.
“Though the agro-climatic conditions prevailing in some parts of the region are moderately suitable for planting rubber, it has been proven through experimental plantation that under appropriate agro-management practices, the commodity can be grown as an economically viable crop,” Mr Mohanan said.
As per reports, the Soil Conservation Department of Assam planted rubber in the state as early as 1950s and the first commercial planting was done by Tripura’s Forest Department in 1963.
Encouraged by the success of pilot plantations, the Tripura Government had set up Tripura Forest Development Plantation Corporation Ltd (TFDPC) in 1970, while seven years later, the Government launched a pilot scheme for the economic settlement of tribals displaced because of rubber farming.
Mr Mohanan said substantial progress in rubber plantations in the region was achieved during the V11th Plan, when the Centre sanctioned a scheme for Accelerated Rubber Development in the North-East.
Exploratory surveys done by the board in the past indicated that a total of 4,50,000 hectares of land in the region is suitable for rubber plantations.
Another positive aspect is that the region is generally free from the major plant diseases that are prevalent in the traditional belt and soil is sufficiently ‘deep’ and easy to work, he said.
“However, proper care has to be taken in selecting land as water-logging and erosion are a common problem,” he observed.
Rubber planting helps in socio-economic development of the rural people and has proven to be an effective programme for economic settlement of tribals.
Scientifically raised rubber plantations provide a green leguminous ground cover and a green umbrella cover. They purify the atmosphere and improve soil properties, he said.
Tokyo futures edge higher as oil steadies (Oct 21)
October 21, 2011
BANGKOK, Oct 21 (Reuters) – Tokyo rubber futures ended slightly higher on Friday on the back of steadier oil prices but the market was still held back by uncertainty about the European debt crisis, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange for March delivery rose 0.7 yen to settle at 282.2 yen ($3.6) per kg.
The most active rubber contract on the Shanghai futures exchange fell 730 yuan to finish at 24,715 yuan ($3,870) per tonne.
“A recovery in oil prices encouraged players to buy back contracts, but the EU debt stalemate still weighed on the market as no one knows what the solution will be,” one dealer said.
Brent crude held steady above $109 after recovering the previous day when the market was optimistic about a solution to the debt crisis, which might stem any slowdown in oil demand.
France and Germany said European leaders would examine in detail a global solution to the crisis on Sunday and aim to adopt the plan on Wednesday at the latest.
Dealers said they expected TOCOM rubber to rise further next week as firm oil prices should lend support, especially as prices had found strong support at 280 yen.
($1 = 76.870 Japanese Yen)
($1 = 6.386 Chinese Yuan)
Rubber Producers’ Group to Advise Member Countries to Slow Exports
October 21, 2011
21 October 2011
The International Rubber Consortium will advise member countries Thailand, Indonesia and Malaysia to slow natural rubber exports, Chief Secretary Yium Tavarolit said Friday.
“IRCo will [also] recommend members tell farmers that they should reduce raw rubber sales until prices are at a level reasonable to both sellers and buyers,” the Bangkok-based Yium said.
The group will keep natural rubber’s floor price at $4 a kilogram, Yium said.
IRCo first issued the recommendation in August amid a selloff in the futures market. Friday’s reminder comes on the heels of sharp declines in natural rubber prices due to global macroeconomic concerns.
Market fundamentals are unchanged, particularly as global carryover stocks are low–about 1.2 million-1.3 million metric tons, compared with about 2 million tons in previous years. Demand is firm as global auto sales are healthy, he said.
IRCo member countries account for 70% of global natural rubber production.
October 21, 2011
GUWAHATI, OCT 21:
The North-East is emerging as the rubber hub of India as experts believe that large-scale cultivation of the crop can bridge the shortfall in supply amid rising demand.
Traditionally, rubber is grown in the southern states of Kerala and Tamil Nadu, but an increase in demand for the crop has resulted in a search for other regions where cultivation can be pursued.
Rubber planting has not expanded to the desired extent in Karnataka, Andhra Pradesh, Goa, Maharashtra and Orissa, where climatic conditions support their growth.
“We believe that now we have to look to the North-East to produce more natural rubber,” Mr K.G. Mohanan, Additional Rubber Production Commissioner of the Rubber Board, said.
A search was launched and it culminated in attempts by the board to grow rubber in Assam, Tripura, Meghalaya, Mizoram, Manipur, Nagaland and Arunachal Pradesh, he said.
“Though the agro-climatic conditions prevailing in some parts of the region are moderately suitable for planting rubber, it has been proven through experimental plantation that under appropriate agro-management practices, the commodity can be grown as an economically viable crop,” Mr Mohanan said.
As per reports, the Soil Conservation Department of Assam planted rubber in the state as early as 1950s and the first commercial planting was done by Tripura’s Forest Department in 1963.
Encouraged by the success of pilot plantations, the Tripura Government had set up Tripura Forest Development Plantation Corporation Ltd (TFDPC) in 1970, while seven years later, the Government launched a pilot scheme for the economic settlement of tribals displaced because of rubber farming.
Mr Mohanan said substantial progress in rubber plantations in the region was achieved during the V11th Plan, when the Centre sanctioned a scheme for Accelerated Rubber Development in the North-East.
Exploratory surveys done by the board in the past indicated that a total of 4,50,000 hectares of land in the region is suitable for rubber plantations.
Another positive aspect is that the region is generally free from the major plant diseases that are prevalent in the traditional belt and soil is sufficiently ‘deep’ and easy to work, he said.
“However, proper care has to be taken in selecting land as water-logging and erosion are a common problem,” he observed.
Rubber planting helps in socio-economic development of the rural people and has proven to be an effective programme for economic settlement of tribals.
Scientifically raised rubber plantations provide a green leguminous ground cover and a green umbrella cover. They purify the atmosphere and improve soil properties, he said.
Tokyo futures edge higher as oil steadies (Oct 21)
October 21, 2011
BANGKOK, Oct 21 (Reuters) – Tokyo rubber futures ended slightly higher on Friday on the back of steadier oil prices but the market was still held back by uncertainty about the European debt crisis, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange for March delivery rose 0.7 yen to settle at 282.2 yen ($3.6) per kg.
The most active rubber contract on the Shanghai futures exchange fell 730 yuan to finish at 24,715 yuan ($3,870) per tonne.
“A recovery in oil prices encouraged players to buy back contracts, but the EU debt stalemate still weighed on the market as no one knows what the solution will be,” one dealer said.
Brent crude held steady above $109 after recovering the previous day when the market was optimistic about a solution to the debt crisis, which might stem any slowdown in oil demand.
France and Germany said European leaders would examine in detail a global solution to the crisis on Sunday and aim to adopt the plan on Wednesday at the latest.
Dealers said they expected TOCOM rubber to rise further next week as firm oil prices should lend support, especially as prices had found strong support at 280 yen.
($1 = 76.870 Japanese Yen)
($1 = 6.386 Chinese Yuan)
Rubber Producers’ Group to Advise Member Countries to Slow Exports
October 21, 2011
21 October 2011
The International Rubber Consortium will advise member countries Thailand, Indonesia and Malaysia to slow natural rubber exports, Chief Secretary Yium Tavarolit said Friday.
“IRCo will [also] recommend members tell farmers that they should reduce raw rubber sales until prices are at a level reasonable to both sellers and buyers,” the Bangkok-based Yium said.
The group will keep natural rubber’s floor price at $4 a kilogram, Yium said.
IRCo first issued the recommendation in August amid a selloff in the futures market. Friday’s reminder comes on the heels of sharp declines in natural rubber prices due to global macroeconomic concerns.
Market fundamentals are unchanged, particularly as global carryover stocks are low–about 1.2 million-1.3 million metric tons, compared with about 2 million tons in previous years. Demand is firm as global auto sales are healthy, he said.
IRCo member countries account for 70% of global natural rubber production.
Friday, October 21, 2011
Solving the data puzzle on India natural rubber fundamentals
Solving the data puzzle on India natural rubber fundamentals
October 20, 2011
By Rakesh Neelakandan Is the Indian Rubber market facing acute shortage of natural rubber?
Is there any problem with the statistical methods that India Rubber Board employs to calculate stocks?
As per the latest figures available with India’s Rubber Board, June-end surplus stocks—or stocks that are available for July with traders—stands at 190312 metric tons.
Meanwhile, the anticipated production figures for August and September are pegged at 71200 tons and 80200 tons respectively. Consumption for the same months are estimated to be 77000 tons and 74000 tons.
The table tells that the excess requirement for the month of August and September stands at 5800 tons and 6200 tons respectively. Imports—block rubber and sheet rubber—for the months stand at 17605 tons and 9100 tons. While the scenario of excess demand fades in August due to aggressive imports at 17605 tons, excess demand for September is expected to be at 2900 tons.
Now, as slowdown takes over the global economy, sluggishness is visible with consumption of rubber in offtakes down to 74000 tons for the month of September.
Though data to this end is yet to be made available, one can safely assume that with July surplus at 190312 tons, coupled with global slowdown denting demand, the requirement would be lethargic.
Result: Surplus Rubber in the country
(Quantity in tons)
Addressing the second question: it is often held by industry bodies like ATMA(Automotive Tyre Manufacturers Association) and AIRIA(All India Rubber Industries Association) that rubber board is making a serious statistical error in calculating the stocks in country; that board is taking into account even the already sold stock which is the inventory of various manufacturing companies.
But, as long as natural rubber is kept as it is, as long as natural rubber is not converted to end-product, the board has no other options; but to follow the current methodology in tabulating stocks.
And the Board is providing stock figures in a segregated form in its statistical news bulletin published every month which is available online.
So, the conclusion that Board’s ‘erroneous’ figures may affect policy prescriptions holds no water.
Source: http://www.commodityonline.com/news/Solving-the-data-puzzle-on-India-natural-rubber-fundamentals-43105-3-1.html
Tokyo futures hit 14-month low on EU debt woes
October 20, 2011
BANGKOK, Oct 20 (Reuters) – Renewed worries about Europe’s debt crisis dragged Tokyo rubber futures to their lowest level in 14 months on Thursday, below the key psychological level of 300 yen, with weaker oil and share prices adding to the pressure, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for March delivery tumbled 20.0 yen, or 6.6 percent, to settle at 281.5 yen ($3.66) per kg. That was the lowest since mid-August 2010.
The most active rubber contract on the Shanghai futures exchange fell 1,170 yuan to finish at 25,445 yuan ($3,989) per tonne.
“Rubber sentiment was not so good after prices broke below 300 yen and it seemed like Europe’s debt crisis could weigh on the market longer than expected,” one dealer said.
Plans to tackle the euro zone debt crisis have stalled, with Paris and Berlin at odds over how to increase the firepower of the region’s bailout fund.
Brent crude slipped below $108 on Thursday, after plunging 2.5 percent in the previous session because of worries that Europe’s failure to end the crisis could hurt oil demand.
Dealers said they expected TOCOM prices to move in a range of 280-290 yen on Friday.
A Fact on the Global Auto Market
October 20, 2011
20 October 2011
Yium Tavarolit, Bangkok
The Scotiabank Group reported on its website on 11 October 2011 that auto sales are accelerating in most regions. While Asia leads global auto markets, North Americans returned to dealer showrooms in September despite volatile financial markets and concerns about the economic outlook. The U.S. passenger car sales showed an annual rise of 13 million units in September, the highest level since 1 April. Light trucks and pick-up trucks and SUV volumes surged more than 20% above a year earlier.
The Group continued that while financial markets remain fixated on the ongoing debt problems inWestern Europe and its impact on global economic activity, the global auto industry is rebounding from this summer’s chain-induced disruption. It added that the global vehicle output rose 5% year on year in August, a sharp improvement from a 2% decline in 2Q11. Assemblies inAsia totaled an annual rate of 40 million units, up from a low of 31 million units in April. Its assemblies is expected to jump to an annual rate of 44 million units for the final months of 2011, surpassing the late-2010 peak and accounting for a record 57% of global vehicle output.
Meanwhile, China’s passenger car sales rose 8.79% in September from a year earlier to 1.32 million units, the China Association of Automobile Manufacturers (CAAM) said 13 October. For the first nine months, passenger car sales rose 6.38% to 10.5 million units from a year earlier. Overall car sales in China are expected to grow less than 5% in 2011, said a senior official of CAAM on the same day. Xiong Chuanlin, Vice Secretary of CAAM said China’s auto exports would likely hit a record high of 800,000 units this year.
“Luxury car sales also continued to surge in September despite Europe’s deepening debt crisis and slowing economic growth in several major markets, making it likely that BMW AG, Daimler AG and Volkswagen AG’s Audi brand will report solid third-quarter earnings growth,” the WSJ Newswires reported on 11 October. Sales for BMW brand rose 9.3% in September to 128,446 units while sales of Audi brand rose by 17% from a year earlier in September to 120,200 units, with strong growth in China, where sales rose 33% to 29,476 units. Also, Daimler’s Mercedes-Benz brand sold 120,982 units for September or up 2% year on year. The brand’s sales rose 7.6% to 919,288 units in the first nine months of the year.
Source: http://www.irco.biz/BlogMoreDetial.php?id=2781%20&ShowContent=%20news
October 20, 2011
By Rakesh Neelakandan Is the Indian Rubber market facing acute shortage of natural rubber?
Is there any problem with the statistical methods that India Rubber Board employs to calculate stocks?
As per the latest figures available with India’s Rubber Board, June-end surplus stocks—or stocks that are available for July with traders—stands at 190312 metric tons.
Meanwhile, the anticipated production figures for August and September are pegged at 71200 tons and 80200 tons respectively. Consumption for the same months are estimated to be 77000 tons and 74000 tons.
The table tells that the excess requirement for the month of August and September stands at 5800 tons and 6200 tons respectively. Imports—block rubber and sheet rubber—for the months stand at 17605 tons and 9100 tons. While the scenario of excess demand fades in August due to aggressive imports at 17605 tons, excess demand for September is expected to be at 2900 tons.
Now, as slowdown takes over the global economy, sluggishness is visible with consumption of rubber in offtakes down to 74000 tons for the month of September.
Though data to this end is yet to be made available, one can safely assume that with July surplus at 190312 tons, coupled with global slowdown denting demand, the requirement would be lethargic.
Result: Surplus Rubber in the country
(Quantity in tons)
Addressing the second question: it is often held by industry bodies like ATMA(Automotive Tyre Manufacturers Association) and AIRIA(All India Rubber Industries Association) that rubber board is making a serious statistical error in calculating the stocks in country; that board is taking into account even the already sold stock which is the inventory of various manufacturing companies.
But, as long as natural rubber is kept as it is, as long as natural rubber is not converted to end-product, the board has no other options; but to follow the current methodology in tabulating stocks.
And the Board is providing stock figures in a segregated form in its statistical news bulletin published every month which is available online.
So, the conclusion that Board’s ‘erroneous’ figures may affect policy prescriptions holds no water.
Source: http://www.commodityonline.com/news/Solving-the-data-puzzle-on-India-natural-rubber-fundamentals-43105-3-1.html
Tokyo futures hit 14-month low on EU debt woes
October 20, 2011
BANGKOK, Oct 20 (Reuters) – Renewed worries about Europe’s debt crisis dragged Tokyo rubber futures to their lowest level in 14 months on Thursday, below the key psychological level of 300 yen, with weaker oil and share prices adding to the pressure, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for March delivery tumbled 20.0 yen, or 6.6 percent, to settle at 281.5 yen ($3.66) per kg. That was the lowest since mid-August 2010.
The most active rubber contract on the Shanghai futures exchange fell 1,170 yuan to finish at 25,445 yuan ($3,989) per tonne.
“Rubber sentiment was not so good after prices broke below 300 yen and it seemed like Europe’s debt crisis could weigh on the market longer than expected,” one dealer said.
Plans to tackle the euro zone debt crisis have stalled, with Paris and Berlin at odds over how to increase the firepower of the region’s bailout fund.
Brent crude slipped below $108 on Thursday, after plunging 2.5 percent in the previous session because of worries that Europe’s failure to end the crisis could hurt oil demand.
Dealers said they expected TOCOM prices to move in a range of 280-290 yen on Friday.
A Fact on the Global Auto Market
October 20, 2011
20 October 2011
Yium Tavarolit, Bangkok
The Scotiabank Group reported on its website on 11 October 2011 that auto sales are accelerating in most regions. While Asia leads global auto markets, North Americans returned to dealer showrooms in September despite volatile financial markets and concerns about the economic outlook. The U.S. passenger car sales showed an annual rise of 13 million units in September, the highest level since 1 April. Light trucks and pick-up trucks and SUV volumes surged more than 20% above a year earlier.
The Group continued that while financial markets remain fixated on the ongoing debt problems inWestern Europe and its impact on global economic activity, the global auto industry is rebounding from this summer’s chain-induced disruption. It added that the global vehicle output rose 5% year on year in August, a sharp improvement from a 2% decline in 2Q11. Assemblies inAsia totaled an annual rate of 40 million units, up from a low of 31 million units in April. Its assemblies is expected to jump to an annual rate of 44 million units for the final months of 2011, surpassing the late-2010 peak and accounting for a record 57% of global vehicle output.
Meanwhile, China’s passenger car sales rose 8.79% in September from a year earlier to 1.32 million units, the China Association of Automobile Manufacturers (CAAM) said 13 October. For the first nine months, passenger car sales rose 6.38% to 10.5 million units from a year earlier. Overall car sales in China are expected to grow less than 5% in 2011, said a senior official of CAAM on the same day. Xiong Chuanlin, Vice Secretary of CAAM said China’s auto exports would likely hit a record high of 800,000 units this year.
“Luxury car sales also continued to surge in September despite Europe’s deepening debt crisis and slowing economic growth in several major markets, making it likely that BMW AG, Daimler AG and Volkswagen AG’s Audi brand will report solid third-quarter earnings growth,” the WSJ Newswires reported on 11 October. Sales for BMW brand rose 9.3% in September to 128,446 units while sales of Audi brand rose by 17% from a year earlier in September to 120,200 units, with strong growth in China, where sales rose 33% to 29,476 units. Also, Daimler’s Mercedes-Benz brand sold 120,982 units for September or up 2% year on year. The brand’s sales rose 7.6% to 919,288 units in the first nine months of the year.
Source: http://www.irco.biz/BlogMoreDetial.php?id=2781%20&ShowContent=%20news
Wednesday, October 19, 2011
Rubber prices seen stabilising into next year
Rubber prices seen stabilising into next year
October 17, 2011
Rubber prices will remain high through the end of the year despite demand erosion from floods coupled with economic slowdown, with excess supply to be absorbed by the rainy season’s arrival in the South in early November.
Pongsak Kerdvongbundit, the president of the Thai Rubber Association, said prices had been volatile this year: They shot up to a record of nearly 200 baht per kilogramme, then nosedived to about 120 baht per kg now.
But Dr Pongsak says the current price is stable, with supply and demand seemingly in balance at this point.
He predicted a price for two months ahead of more than 100 baht, with a possible slight rise due to disappearance of supply from flood-affected plants and the rainy season’s arrival at southern plantations.
As for next year, a new supply of 200,000 tonnes from the Northeast will gradually enter the market.
Last year, Thailand shipped 3.2 million tonnes of rubber, or more than 30% of global output.
To balance supply and demand, Dr Pongsak said, farmers will cut their old rubber trees in a bid to prepare for a new crop, amounting to 400,000 rai or 120,000 tonnes of rubber output.
“Rubber farmers shouldn’t worry about price,” he said, “as the International Rubber Consortium Limited, the organisation that was a venture between Thailand, Indonesia and Malaysia, is set to maintain the rubber export price.
“So far, the target price is at least US$40 per kilogramme.”
Meanwhile, the Agricultural Futures Exchange of Thailand (AFET) plans to increase the number of contracts by asking the world’s leading tyre makers to trade 300,000 tonnes, or 10% of total exports per year, through the AFET, with incentives offered.
Thailand’s farm product futures trade has been thin from the start seven years ago, while Japan’s Tocom and the Shanghai market have secured most rubber futures trading.
Dr Pongsak said the AFET should have an aggressive development plan to increase market liquidity. He recommended a state agency be set up as a market maker to increase buying, with hedge funds to increase liquidity.
“The exchange should invite some big rubber users to join the market, such as Bridgestone and other tyre makers, to help increase trading volume,” he said.
The bourse should have a clear physical delivery process and quality control, instilling confidence if the product is needed for delivery.
Dr Pongsak also suggested the government reduce the fee levied on rubber exporters from 5 baht per kg to 3 baht to draw more traders.
Prasat Kesawapitak, the AFET chairman, said the exchange was considering easing some regulations to accommodate new traders, as well as increasing types of physical rubber in line with other exchanges. The proposal will go to the government soon.
Wanchai Palotaitakerng, the chairman of the Agricultural Futures Trading Commission, will meet soon with Vorapol Sokatiyanurak, the new Securities and Exchange Commission secretary-general, to seek advice on allowing securities companies that are members of the SET to become AFET brokers as well.
Brokerage members of the SET are prohibited from operating on the AFET.
The futures exchange has only five brokers at present, with average trade of 500-700 contracts per day. Rubber is the only item trading in substantial volume.
Under the SET Act, SET members cannot send trade orders to the other exchange, but if the SET is demutualised, a plan currently on hold, the regulations would be amended.
Tokyo futures near one-week low (Oct 18)
October 18, 2011
BANGKOK, Oct 18 (Reuters) – Tokyo rubber futures dropped more than 3.4 percent to a near one-week low on Tuesday, retreating from a previous three-week high due to falling oil prices, while persistent concerns on the Europe debt crisis still weighed on the market, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for March delivery fell 8.1 yen to settle at 313.2 yen ($4.08) per kg.
It fell as low as 3.4 percent to finish at 310.5 yen, the lowest since Oct. 12.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 1,400 yuan to finish at 27,300 yuan ($4,2851) per tonne.
“Rubber sentiment turned weak due to Europe debt fears. However, Chinese data helped ease some concerns and it seemed like recovering oil prices lent some support,” one dealer said.
Brent crude futures were steady above $110 a barrel, recovering from nearly 2 percent losses during overnight trade as Chinese economic data helped offset fears about Euro debt crisis.
China’s annual economic growth eased to 9.1 percent in the third quarter from 9.5 percent in the previous quarter, the National Bureau of Statistics said on Tuesday, as tight domestic monetary policy and easing foreign demand crimped activity.
The rate was slightly below market forecasts for growth of 9.2 percent, but this was offset by better-than-expected industrial production and retail sales numbers for September.
German Finance Minister Wolfgang Schaeuble said European governments would not present a definitive plan for the sovereign debt crisis at the Oct. 23 summit, curbing investor optimism about prospects for tackling the region’s problems.
Dealers said TOCOM prices could rise further on Wednesday after prices found a strong support level of 310 yen, but still gains were likely to be limited by profit-taking.
($1 = 76.720 Japanese Yen)
($1 = 6.371 Chinese Yuan)
Cambodia’s Rubber Exports up 67 Pct in 9 Months
October 17, 2011
Cambodia has seen an increase of 67 percent in the exports of rubber latex in the first nine months of this year, compared with the same period a year ago, according to the statistics from the Commerce Ministry on Monday.
Cambodia has seen an increase of 67 percent in the exports of rubber latex in the first nine months of this year, compared with the same period a year ago, according to the statistics from the Commerce Ministry on Monday.
The data recorded that from January to September this year, the country had exported a total of 35,000 tons of rubber latex, 67 percent rise from 21,000 tons at the same period last year.
The country earned the total revenues of 160 million U.S. dollars during the first nine months of this year, 186 percent rise from 55.9 million U.S. dollars it earned within the same period last year, it added.
A ton of good quality rubber latex is about 4,100 U.S. dollars on Monday, said Heng Sreng, deputy director of Long Sreng International and president of the Boeung Keth Rubber Plantation in Kampong Cham province.
Cambodia’s rubber latex has been exported to Malaysia, Vietnam, China and South Korea, he added.
Currently, the country has grown approximately 210,000 hectares of rubber plantations, most of them are young crops, which have not yet yielded, according to the statistics of the Agriculture Ministry’s Rubber Department.
Rubber plantations are found grown mostly in the provinces of Kampong Cham, Kampong Thom, Mondulkiri, Ratanakiri, Kratie and Preah Vihear.
Vietnam is the leading country investing in rubber plantations in Cambodia with up to 100,000 hectares of concessional land from Cambodian government.
Market on Oct 18: Buyer resistance saps spot rubber
October 18, 2011
KOTTAYAM, OCT. 18:
Spot rubber turned weak on Tuesday. According to sources, prices fell on buyer resistance following a drop in the domestic and international rubber futures.
Arrivals continued to be low though the peak production season is on, indicating that growers are holding on to their stocks. Hence, volumes were low.
Sheet rubber dropped to Rs 214 (215) a kg, according to traders. The grade slipped to Rs 214.50 (215) a kg both at Kottayam and Kochi, as reported by the Rubber Board.
The November series declined to Rs 213.24 (215.10), December to Rs 215.20 (217.25), January to Rs 216.92 (220.38) on the National Multi Commodity Exchange.
RSS 3 (spot) weakened to Rs 207.74 (208.74) a kg at Bangkok. The October futures declined ¥304.8 (Rs 195.99) from ¥312.5 a kg during the day session and then to ¥298 (Rs 191.62) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 214 (215); RSS-5: 211 (212); ungraded: 204 (206); ISNR 20: 203.50 (205) and latex 60 per cent: 130 (130.50).
Market on Oct 17: Spot rubber rules steady
October 17, 2011
KOTTAYAM, OCT. 17:
Physical rubber prices ruled steady on Monday. The market lost its direction following the weakness in domestic futures during late trades. Though chances for a sharp upside move are limited as the peak production season is on and the stocks in warehouses are on a rise; gains in the international markets might keep the sentiments on the positive side, analysts said.
Investing in commodities still sounds risky as there is a strong possibility that the long-term trend in most commodities is bearish despite some short lived rallies as they remain well below the peaks reached early this year.Sheet rubber finished unchanged at Rs 215 a kg, according to traders. The grade improved to Rs 215 (214.50) a kg both at Kottayam and Kochi, as reported by the Rubber Board.
In futures, the November series weakened to Rs 214.86 (216.08), December to Rs 217.10 (218.36), January to Rs 220.26 (221.40) and February to Rs 223.01 (224.47) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) inched up to Rs 208.74 (208.69) a kg at Bangkok.
The October futures increased to ¥312.5 (Rs 197.64) from ¥308.3 a kg during the day session but then slipped to ¥311.2 (Rs 196.86) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 215 (215); RSS-5: 212 (212); ungraded: 206 (206); ISNR 20: 205 (205) and latex 60 per cent: 130.50 (130.50).
Tyre majors scout for rubber estates abroad
October 18, 2011
KOCHI: Persistent high prices of natural rubber in India are forcing tyre majors to scout for plantations abroad. Leading players like Apollo Tyres, MRF and JK are on the lookout for acquiring plantations or purchasing land to grow rubber as a longterm solution to meet the widening gap between production and consumption of rubber in the country. Southeast Asia and Africa are the two regions that are being considered.
Apollo Tyres was the first to announce its plans for overseas acquisition of plantations. Company chairman and managing director Onkar S Kanwar recently said the company acquired 10,000 hectare on lease in Laos for growing rubber, which would meet a quarter of its monthly requirement of 15,000-16,000 tonne.
A company spokesperson said the tyre major is exploring all options in taking over plantations in Southeast Asia. Apollo has four plants in India, two in South Africa and one in Netherlands. MRF recently announced plans to acquire plantations or companies abroad to offset the high import cost. The Rs 10,000-crore company is looking at opportunities in Southeast Asia, Europe and China. “We are still in dialogue and haven’t finalized any deal. We cannot say when we will strike the deal,” marketing director Koshy Varghese told ET.
JK Tyres, too, is hunting for plantations in Southeast Asia as it fears consumption will continue to override production. “We are examining the options of buying land and growing rubber or whole plantations. But since rubber prices are ruling high, there are hardly any sellers for plantations. We will go by parameters like economic size and quality,” said Swaranjit Singh, the company’s materials director.
RPG Group, which owns Ceat Tyres, is scouting for acquisition through its plantation company Harrisons Malayalam (HML). “Governments are willing to give land on long-term lease and it will take seven years to see the result. We are hopeful of finalizing a deal in three months. Our aim is to replicate HML activity abroad,” said HML managing director Pankaj Kapoor.
Soaring rubber prices have upset the calculations of tyre majors as natural rubber is the important component in tyre production. Given the pace at which prices are shooting up, they don’t want to depend on domestic production alone to feed their expansion plans. Imports do not seem to be an attractive option this year with international prices ruling high and the value of the rupee going down.
In 2010-11, the average price of RSS-4 variety used by tyre manufacturers stood at Rs 190 per kg. In the current year, it has been hovering well above Rs 200 per kg for most of the time after touching Rs 240 early during the year. Consequently, the bottomlines of tyre companies took a hit in the first quarter of the current year.
October 17, 2011
Rubber prices will remain high through the end of the year despite demand erosion from floods coupled with economic slowdown, with excess supply to be absorbed by the rainy season’s arrival in the South in early November.
Pongsak Kerdvongbundit, the president of the Thai Rubber Association, said prices had been volatile this year: They shot up to a record of nearly 200 baht per kilogramme, then nosedived to about 120 baht per kg now.
But Dr Pongsak says the current price is stable, with supply and demand seemingly in balance at this point.
He predicted a price for two months ahead of more than 100 baht, with a possible slight rise due to disappearance of supply from flood-affected plants and the rainy season’s arrival at southern plantations.
As for next year, a new supply of 200,000 tonnes from the Northeast will gradually enter the market.
Last year, Thailand shipped 3.2 million tonnes of rubber, or more than 30% of global output.
To balance supply and demand, Dr Pongsak said, farmers will cut their old rubber trees in a bid to prepare for a new crop, amounting to 400,000 rai or 120,000 tonnes of rubber output.
“Rubber farmers shouldn’t worry about price,” he said, “as the International Rubber Consortium Limited, the organisation that was a venture between Thailand, Indonesia and Malaysia, is set to maintain the rubber export price.
“So far, the target price is at least US$40 per kilogramme.”
Meanwhile, the Agricultural Futures Exchange of Thailand (AFET) plans to increase the number of contracts by asking the world’s leading tyre makers to trade 300,000 tonnes, or 10% of total exports per year, through the AFET, with incentives offered.
Thailand’s farm product futures trade has been thin from the start seven years ago, while Japan’s Tocom and the Shanghai market have secured most rubber futures trading.
Dr Pongsak said the AFET should have an aggressive development plan to increase market liquidity. He recommended a state agency be set up as a market maker to increase buying, with hedge funds to increase liquidity.
“The exchange should invite some big rubber users to join the market, such as Bridgestone and other tyre makers, to help increase trading volume,” he said.
The bourse should have a clear physical delivery process and quality control, instilling confidence if the product is needed for delivery.
Dr Pongsak also suggested the government reduce the fee levied on rubber exporters from 5 baht per kg to 3 baht to draw more traders.
Prasat Kesawapitak, the AFET chairman, said the exchange was considering easing some regulations to accommodate new traders, as well as increasing types of physical rubber in line with other exchanges. The proposal will go to the government soon.
Wanchai Palotaitakerng, the chairman of the Agricultural Futures Trading Commission, will meet soon with Vorapol Sokatiyanurak, the new Securities and Exchange Commission secretary-general, to seek advice on allowing securities companies that are members of the SET to become AFET brokers as well.
Brokerage members of the SET are prohibited from operating on the AFET.
The futures exchange has only five brokers at present, with average trade of 500-700 contracts per day. Rubber is the only item trading in substantial volume.
Under the SET Act, SET members cannot send trade orders to the other exchange, but if the SET is demutualised, a plan currently on hold, the regulations would be amended.
Tokyo futures near one-week low (Oct 18)
October 18, 2011
BANGKOK, Oct 18 (Reuters) – Tokyo rubber futures dropped more than 3.4 percent to a near one-week low on Tuesday, retreating from a previous three-week high due to falling oil prices, while persistent concerns on the Europe debt crisis still weighed on the market, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for March delivery fell 8.1 yen to settle at 313.2 yen ($4.08) per kg.
It fell as low as 3.4 percent to finish at 310.5 yen, the lowest since Oct. 12.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 1,400 yuan to finish at 27,300 yuan ($4,2851) per tonne.
“Rubber sentiment turned weak due to Europe debt fears. However, Chinese data helped ease some concerns and it seemed like recovering oil prices lent some support,” one dealer said.
Brent crude futures were steady above $110 a barrel, recovering from nearly 2 percent losses during overnight trade as Chinese economic data helped offset fears about Euro debt crisis.
China’s annual economic growth eased to 9.1 percent in the third quarter from 9.5 percent in the previous quarter, the National Bureau of Statistics said on Tuesday, as tight domestic monetary policy and easing foreign demand crimped activity.
The rate was slightly below market forecasts for growth of 9.2 percent, but this was offset by better-than-expected industrial production and retail sales numbers for September.
German Finance Minister Wolfgang Schaeuble said European governments would not present a definitive plan for the sovereign debt crisis at the Oct. 23 summit, curbing investor optimism about prospects for tackling the region’s problems.
Dealers said TOCOM prices could rise further on Wednesday after prices found a strong support level of 310 yen, but still gains were likely to be limited by profit-taking.
($1 = 76.720 Japanese Yen)
($1 = 6.371 Chinese Yuan)
Cambodia’s Rubber Exports up 67 Pct in 9 Months
October 17, 2011
Cambodia has seen an increase of 67 percent in the exports of rubber latex in the first nine months of this year, compared with the same period a year ago, according to the statistics from the Commerce Ministry on Monday.
Cambodia has seen an increase of 67 percent in the exports of rubber latex in the first nine months of this year, compared with the same period a year ago, according to the statistics from the Commerce Ministry on Monday.
The data recorded that from January to September this year, the country had exported a total of 35,000 tons of rubber latex, 67 percent rise from 21,000 tons at the same period last year.
The country earned the total revenues of 160 million U.S. dollars during the first nine months of this year, 186 percent rise from 55.9 million U.S. dollars it earned within the same period last year, it added.
A ton of good quality rubber latex is about 4,100 U.S. dollars on Monday, said Heng Sreng, deputy director of Long Sreng International and president of the Boeung Keth Rubber Plantation in Kampong Cham province.
Cambodia’s rubber latex has been exported to Malaysia, Vietnam, China and South Korea, he added.
Currently, the country has grown approximately 210,000 hectares of rubber plantations, most of them are young crops, which have not yet yielded, according to the statistics of the Agriculture Ministry’s Rubber Department.
Rubber plantations are found grown mostly in the provinces of Kampong Cham, Kampong Thom, Mondulkiri, Ratanakiri, Kratie and Preah Vihear.
Vietnam is the leading country investing in rubber plantations in Cambodia with up to 100,000 hectares of concessional land from Cambodian government.
Market on Oct 18: Buyer resistance saps spot rubber
October 18, 2011
KOTTAYAM, OCT. 18:
Spot rubber turned weak on Tuesday. According to sources, prices fell on buyer resistance following a drop in the domestic and international rubber futures.
Arrivals continued to be low though the peak production season is on, indicating that growers are holding on to their stocks. Hence, volumes were low.
Sheet rubber dropped to Rs 214 (215) a kg, according to traders. The grade slipped to Rs 214.50 (215) a kg both at Kottayam and Kochi, as reported by the Rubber Board.
The November series declined to Rs 213.24 (215.10), December to Rs 215.20 (217.25), January to Rs 216.92 (220.38) on the National Multi Commodity Exchange.
RSS 3 (spot) weakened to Rs 207.74 (208.74) a kg at Bangkok. The October futures declined ¥304.8 (Rs 195.99) from ¥312.5 a kg during the day session and then to ¥298 (Rs 191.62) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 214 (215); RSS-5: 211 (212); ungraded: 204 (206); ISNR 20: 203.50 (205) and latex 60 per cent: 130 (130.50).
Market on Oct 17: Spot rubber rules steady
October 17, 2011
KOTTAYAM, OCT. 17:
Physical rubber prices ruled steady on Monday. The market lost its direction following the weakness in domestic futures during late trades. Though chances for a sharp upside move are limited as the peak production season is on and the stocks in warehouses are on a rise; gains in the international markets might keep the sentiments on the positive side, analysts said.
Investing in commodities still sounds risky as there is a strong possibility that the long-term trend in most commodities is bearish despite some short lived rallies as they remain well below the peaks reached early this year.Sheet rubber finished unchanged at Rs 215 a kg, according to traders. The grade improved to Rs 215 (214.50) a kg both at Kottayam and Kochi, as reported by the Rubber Board.
In futures, the November series weakened to Rs 214.86 (216.08), December to Rs 217.10 (218.36), January to Rs 220.26 (221.40) and February to Rs 223.01 (224.47) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) inched up to Rs 208.74 (208.69) a kg at Bangkok.
The October futures increased to ¥312.5 (Rs 197.64) from ¥308.3 a kg during the day session but then slipped to ¥311.2 (Rs 196.86) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 215 (215); RSS-5: 212 (212); ungraded: 206 (206); ISNR 20: 205 (205) and latex 60 per cent: 130.50 (130.50).
Tyre majors scout for rubber estates abroad
October 18, 2011
KOCHI: Persistent high prices of natural rubber in India are forcing tyre majors to scout for plantations abroad. Leading players like Apollo Tyres, MRF and JK are on the lookout for acquiring plantations or purchasing land to grow rubber as a longterm solution to meet the widening gap between production and consumption of rubber in the country. Southeast Asia and Africa are the two regions that are being considered.
Apollo Tyres was the first to announce its plans for overseas acquisition of plantations. Company chairman and managing director Onkar S Kanwar recently said the company acquired 10,000 hectare on lease in Laos for growing rubber, which would meet a quarter of its monthly requirement of 15,000-16,000 tonne.
A company spokesperson said the tyre major is exploring all options in taking over plantations in Southeast Asia. Apollo has four plants in India, two in South Africa and one in Netherlands. MRF recently announced plans to acquire plantations or companies abroad to offset the high import cost. The Rs 10,000-crore company is looking at opportunities in Southeast Asia, Europe and China. “We are still in dialogue and haven’t finalized any deal. We cannot say when we will strike the deal,” marketing director Koshy Varghese told ET.
JK Tyres, too, is hunting for plantations in Southeast Asia as it fears consumption will continue to override production. “We are examining the options of buying land and growing rubber or whole plantations. But since rubber prices are ruling high, there are hardly any sellers for plantations. We will go by parameters like economic size and quality,” said Swaranjit Singh, the company’s materials director.
RPG Group, which owns Ceat Tyres, is scouting for acquisition through its plantation company Harrisons Malayalam (HML). “Governments are willing to give land on long-term lease and it will take seven years to see the result. We are hopeful of finalizing a deal in three months. Our aim is to replicate HML activity abroad,” said HML managing director Pankaj Kapoor.
Soaring rubber prices have upset the calculations of tyre majors as natural rubber is the important component in tyre production. Given the pace at which prices are shooting up, they don’t want to depend on domestic production alone to feed their expansion plans. Imports do not seem to be an attractive option this year with international prices ruling high and the value of the rupee going down.
In 2010-11, the average price of RSS-4 variety used by tyre manufacturers stood at Rs 190 per kg. In the current year, it has been hovering well above Rs 200 per kg for most of the time after touching Rs 240 early during the year. Consequently, the bottomlines of tyre companies took a hit in the first quarter of the current year.
Friday, October 14, 2011
Rubber consumption falls 8% to 74,000 t in Sept
Rubber consumption falls 8% to 74,000 t in Sept
October 13, 2011
NEW DELHI, OCT 13:
Natural rubber consumption fell 8 per cent to 74,000 tonnes in September 2011, while production rose 3 per cent to 80,200 tonnes.
The consumption stood at 80,500 tonnes in September 2010, whereas output stood at 77,500 tonnes in the same period, according to data released by the Rubber Board.
On a month-on-month basis, rubber consumption declined by about 4 per cent to 74,000 tonnes last month against 77,000 tonnes in the previous month.
Natural rubber imports fell 73 per cent to 9,099 tonnes last month from 33,477 tonnes in the year-ago period. Overseas shipments jumped more than 17-fold to 3,313 tonnes in September this year from 194 tonnes in the same period of the previous year.
Rubber production in the first half of the current fiscal rose 4.3 per cent to 3,91,400 tonnes from 3,75,250 tonnes in the same period of the previous fiscal.
Consumption rose about 2 per cent to 4,76,215 tonnes in April-September 2011-12 fiscal from 4,69,050 tonnes in the year-ago period.
Imports fell to 88,760 tonnes from 1,18,535 tonnes, while exports jumped to 16,503 tonnes from 4,558 tonnes. The closing stock of rubber in 2011-12 is projected at 2,79,477 tonnes.
According to the Rubber Board, domestic production in 2011-12 is estimated at 9,02,000 tonnes, while consumption has been projected at 9,77,000 tonnes.
The board expects imports of natural rubber to total 1.2 lakh tonnes and exports of 50,000 tonnes in 2011-12.
Natural rubber prices continue steady rise (Oct 13)
Written by HMH | October 13, 2011 | 0 |
London — Rubber prices continue to move slowly upwards overnight, remaining solidly above $4. On Tokyo’s Tocom Exchange, prices for the six-month contract increased by 4 yen, to close at yen 317.7 ($4.012) per kg on Thursday 13 Oct. Shorter-dated prices also rose to close at yen 312.6.
In Singapore, SGX said TSR20 for delivery in March 2012 fell by 5 cents to close at $4.15.
In India, NMCE said October deliveries rose by a fraction of a rupee, to close at Rs 216.8 ($4.39) per kilo.
In China the Shanghai Futures Exchange was unchanged October deliveries trading around Yuan 29.5 ($4.63) per kilo.
Japan’s imports of natural rubber in August fell 0.4% year on year
Written by HMH | October 13, 2011 | 0 |
(Reuters, Oct 12) Rubber Trade Association of Japan (Rubber Trade Association of Japan) released data show that Japan’s eight months of natural rubber imports fell 0.4% to68,967 tons, compared with the previous month increased 17% .
As of 9 January 30 , the Japanese Inventory of natural rubber, 11,561 tons, compared with 9 months 20 days estimated10,061 tons of high 15% . Inventory of natural latex from the383 tons to 403 tons of solid synthetic rubber stocks from the1,669 tons to 1,675 tons.
Source: Dow Jones
Tyre makers: Fall in rubber prices to lift margins by 200-300 bps
Written by HMH | October 13, 2011 | 0 |
The Eurozone crisis triggered a global markets rout that has led to a decline in prices across asset classes. The BSE Sensex declined 12% from July to September and tyre companies were also pummelled. With the fall in commodities, global rubber prices have declined almost 30% over the past three months, which comes as a blessing for tyre makers.
Any improvement in market sentiment could trigger a rally in these companies as profitability will improve with the fall in the key tyre-making ingredient.
International rubber prices have been volatile since January 2011, but fell to their lowest in September 2011. Given that local prices follow the global trend, a further decline in rubber prices can be expected. One of the main reasons for this is the sluggishness in demand from the automobile sector. But the replacement market can be a redeeming factor.
The fall in rubber prices will improve operating profit margins by at least 200-300 basis points on an average. Moreover, a weaker rupee will benefit exporters.
Apollo Tyres earns about 34% of its total revenue from operations in Europe and South Africa and has one of the highest operating profit margins in the industry. Yet, over the past few quarters high rubber prices have led to margin compression. Its share price has fallen around 30% in the July-September period. At Rs 57, its trades at 6.5 times its trailing 12-month earnings and is currently one of the cheapest stocks in the sector.
JK Tyre and Ceat have also fallen over 30% each during the same period, but JK Tyre is a better bet. As of March 2011, its annual turnover was Rs 5,945.44 crore. At Rs 70 it trades at 6.7 times its trailing 12-month earnings and is fairly priced. Ceat, on the other hand, clocked an annual turnover of Rs 3,602.39 crore and trades at Rs 75, which is 12.7 times its earnings, making it expensive.
MRF, the largest domestic tyremaker with a 21% market share, has resisted the decline in the markets, falling only 4%. Meanwhile, Balkrishna Industries has risen 6%.
Both companies earn a significant share of their revenue through exports and, therefore, will gain from the rupee depreciation. These stocks trade at 9.32 times and 8.23 times earnings per share and are fairly valued.
October 13, 2011
NEW DELHI, OCT 13:
Natural rubber consumption fell 8 per cent to 74,000 tonnes in September 2011, while production rose 3 per cent to 80,200 tonnes.
The consumption stood at 80,500 tonnes in September 2010, whereas output stood at 77,500 tonnes in the same period, according to data released by the Rubber Board.
On a month-on-month basis, rubber consumption declined by about 4 per cent to 74,000 tonnes last month against 77,000 tonnes in the previous month.
Natural rubber imports fell 73 per cent to 9,099 tonnes last month from 33,477 tonnes in the year-ago period. Overseas shipments jumped more than 17-fold to 3,313 tonnes in September this year from 194 tonnes in the same period of the previous year.
Rubber production in the first half of the current fiscal rose 4.3 per cent to 3,91,400 tonnes from 3,75,250 tonnes in the same period of the previous fiscal.
Consumption rose about 2 per cent to 4,76,215 tonnes in April-September 2011-12 fiscal from 4,69,050 tonnes in the year-ago period.
Imports fell to 88,760 tonnes from 1,18,535 tonnes, while exports jumped to 16,503 tonnes from 4,558 tonnes. The closing stock of rubber in 2011-12 is projected at 2,79,477 tonnes.
According to the Rubber Board, domestic production in 2011-12 is estimated at 9,02,000 tonnes, while consumption has been projected at 9,77,000 tonnes.
The board expects imports of natural rubber to total 1.2 lakh tonnes and exports of 50,000 tonnes in 2011-12.
Natural rubber prices continue steady rise (Oct 13)
Written by HMH | October 13, 2011 | 0 |
London — Rubber prices continue to move slowly upwards overnight, remaining solidly above $4. On Tokyo’s Tocom Exchange, prices for the six-month contract increased by 4 yen, to close at yen 317.7 ($4.012) per kg on Thursday 13 Oct. Shorter-dated prices also rose to close at yen 312.6.
In Singapore, SGX said TSR20 for delivery in March 2012 fell by 5 cents to close at $4.15.
In India, NMCE said October deliveries rose by a fraction of a rupee, to close at Rs 216.8 ($4.39) per kilo.
In China the Shanghai Futures Exchange was unchanged October deliveries trading around Yuan 29.5 ($4.63) per kilo.
Japan’s imports of natural rubber in August fell 0.4% year on year
Written by HMH | October 13, 2011 | 0 |
(Reuters, Oct 12) Rubber Trade Association of Japan (Rubber Trade Association of Japan) released data show that Japan’s eight months of natural rubber imports fell 0.4% to68,967 tons, compared with the previous month increased 17% .
As of 9 January 30 , the Japanese Inventory of natural rubber, 11,561 tons, compared with 9 months 20 days estimated10,061 tons of high 15% . Inventory of natural latex from the383 tons to 403 tons of solid synthetic rubber stocks from the1,669 tons to 1,675 tons.
Source: Dow Jones
Tyre makers: Fall in rubber prices to lift margins by 200-300 bps
Written by HMH | October 13, 2011 | 0 |
The Eurozone crisis triggered a global markets rout that has led to a decline in prices across asset classes. The BSE Sensex declined 12% from July to September and tyre companies were also pummelled. With the fall in commodities, global rubber prices have declined almost 30% over the past three months, which comes as a blessing for tyre makers.
Any improvement in market sentiment could trigger a rally in these companies as profitability will improve with the fall in the key tyre-making ingredient.
International rubber prices have been volatile since January 2011, but fell to their lowest in September 2011. Given that local prices follow the global trend, a further decline in rubber prices can be expected. One of the main reasons for this is the sluggishness in demand from the automobile sector. But the replacement market can be a redeeming factor.
The fall in rubber prices will improve operating profit margins by at least 200-300 basis points on an average. Moreover, a weaker rupee will benefit exporters.
Apollo Tyres earns about 34% of its total revenue from operations in Europe and South Africa and has one of the highest operating profit margins in the industry. Yet, over the past few quarters high rubber prices have led to margin compression. Its share price has fallen around 30% in the July-September period. At Rs 57, its trades at 6.5 times its trailing 12-month earnings and is currently one of the cheapest stocks in the sector.
JK Tyre and Ceat have also fallen over 30% each during the same period, but JK Tyre is a better bet. As of March 2011, its annual turnover was Rs 5,945.44 crore. At Rs 70 it trades at 6.7 times its trailing 12-month earnings and is fairly priced. Ceat, on the other hand, clocked an annual turnover of Rs 3,602.39 crore and trades at Rs 75, which is 12.7 times its earnings, making it expensive.
MRF, the largest domestic tyremaker with a 21% market share, has resisted the decline in the markets, falling only 4%. Meanwhile, Balkrishna Industries has risen 6%.
Both companies earn a significant share of their revenue through exports and, therefore, will gain from the rupee depreciation. These stocks trade at 9.32 times and 8.23 times earnings per share and are fairly valued.
Monday, October 10, 2011
Dunlop suspends work at Bengal tyre factory
Dunlop suspends work at Bengal tyre factory
October 8, 2011
Kolkata, Oct 8 (IANS) Work at tyre-maker Dunlop’s factory in Sahagunj area of West Bengal’s Hooghly district was suspended Saturday, five months after a similar temporary shut down in April.
The management of the factory put up suspension of work notice at the factory gate Friday night. About 900 workers are employed at the unit.
The management earlier declared suspension of work at the factory in April this year. Following demonstrations by trade unions, it withdrew the notice and asked the workers to join duty after a few days.
In the notice, the Ruia group company said: ‘The management had invested huge amount of money for the revival of the Sahagunj plant. But with the indulgence of some anti-socials, a section of recalcitrant workers resorted to disruptive activities, including vandalism.’
The management also cited other reasons like ‘exorbitant conversion cost, hefty increase in raw material prices without corresponding increase in tyre prices, continuous losses and cash crunch’ for its inability to run the factory.
It also claimed that the company had no liability to pay wages to the workers during the period of suspension of operation.
Malaysia says 2012 palm oil, rubber output to grow on higher acreage, replanting
Written by HMH | October 7, 2011 | 0 |
KUALA LUMPUR, Oct 7 (Reuters) – Malaysia’s palm oil and rubber production may expand next year on improving yields and higher acreage, the government said in its annual economic report on Friday.
Crude palm oil output in the world’s second largest producer could rise 2.2 percent to 18.7 million tonnes from a projected 18.3 million tonnes in 2011 due to aggressive replanting, the Finance Ministry said in the 2011/2012 economic report.
For the first eight months of this year, Malaysia produced 12 million tonnes of the tropical oil amid signs of weakening yields due to the after effects of El Nino-driven hotter weather in 2010.
By comparison, top palm oil producer Indonesia is expected to produce 23 million tonnes this year on faster expanding acreage.
“The oil palm industry is forecast to grow 7.1 percent over the next five years, driven by further gains in average productivity,” said the report that was issued during Malaysia’s budget presentation.
“Meanwhile, efforts have been intensified to increase rubber productivity to reach the target of two million tonnes output by 2020.”
As the third biggest rubber producer after Thailand and Indonesia, Malaysia is set to harvest 1.04 million tonnes of natural rubber next year, slightly higher than the 1 million tonnes seen for 2011.
That amount is less than a third of Thailand’s rubber production, which projected to rise to 3.35 million tonnes this year, as Malaysian farmers prefer to plant lucrative oil palms.
The report said Malaysia’s oil palm acreage will rise 4.1 percent to 5.1 million hectares this year from 4.9 million hectares in 2010. Land under rubber was likely to expand 2.7 percent to 1.1 million hectares this year from last year.
The acreage expansion for both commodities are due to the opening up of new areas in Sabah and Sarawak states on Borneo island, the report said.
The government currently has a target to open up 30,000 hectares of land annually in both these regions for rubber.
OPTIMISTIC 2011 OUTLOOK FOR COMMODITY PRICES
The economic report said the recent price discount of crude palm oil to soy oil of about $200 a tonne would help sustain demand. Palm oil prices are expected to average 3,200 ringgit ($1,004) this year, up 18.5 percent from last year.
Average prices on the Bursa Malaysia Derivatives Exchange so far this year stand at 3,300 ringgit and traders say there may be some declines if investors continue to sell on concerns the euro zone debt crisis may plunge the world into a recession.
Prices of Standard Malaysian Rubber (SMR) 20 are likely to remain firm and average 13.00 ringgit per kg this year compared to 10.58 ringgit last year.
“The favourable price was supported by stronger demand, particularly from China as well as tight supply due to lower output from Thailand,” the report said.
“Global tyre demand is envisaged to expand at a faster pace, led by strong vehicle sales in China which will help sustain rubber prices.”
India: Rubber imports to slip on weak rupee
Written by HMH | October 5, 2011 | 0 |
New Delhi: India’s natural rubber imports are set to slump in the fiscal year through March 2012, as a weakening rupee has made overseas purchases dearer for tyre makers, worsening a demand slowdown on persistent worries about a wobbly economy.
India, which overtook the US as the world’s second-largest natural rubber consumer last year, will likely import around 1,25,000 tonne of natural rubber in 2011-12, down nearly 30% from a year earlier, government and industry sources said on Wednesday. The imports dipped 11% to 76,116 tonne between April and August, compared with 85,058 tonne a year earlier, data by the state-run Rubber Board showed.
Earlier this year, the government cut the import tax on natural rubber to an effective 7.5% from 20% to boost supplies for tyre makers that were struggling to cope with a shortage of the raw material.
The Automotive Tyre Manufacturers’ Association, members of which account for around 90% of the country’s tyre output, had initially projected a shortfall of around 2,00,000 tonne in 2011-12, expecting higher demand from the country’s booming automobiles sector.
Tyremakers account for more than 60% of the country’s natural rubber demand. India, also the world’s fourth-largest natural rubber producer, expects output to rise 4.6% to 9,02,000 tonne this fiscal, according to the Rubber Board’s forecast.
“Although international prices have softened recently, the rupee has depreciated sharply in recent months. Vehicle sales are also falling during the peak rubber producing season. So imports have been affected,” said Rajiv Budhraja, the director-general of Atma.
The rupee has depreciated by more than 8% since September as investors relied on the haven appeal of the dollar amid the financial crisis, making overseas purchases unattractive for Indian companies. Domestic natural rubber prices of the popular RSS-4 variety were ruling slightly higher at around R2,08,500 per tonne on Tuesday from R1,99,720 a tonne in key supplier Thailand for a comparable variety.
Passenger vehicle sales, including cars, vans and sport utility vehicles, fell 5.7% in August, the second fall in two-and-a-half years, as rising interest costs bite into demand, aiding a fall in imports.
A senior executive with a tyre company said adequate rubber stocks with some companies have prevented massive overseas purchases by them, especially in times of economic uncertainties. The Rubber Board forecasts stocks at 2,71,000 tonne by the end of the 2011-12 fiscal.
India was one of the few countries where consumption rose at a much faster pace in 2010-11 than output because of surging demand for automobiles, driving up prices by more than 50% from a year earlier. Earlier this year, the commerce ministry had even proposed to the revenue department of the finance ministry to allow tax-free imports of up to 1,50,000 tonne of natural rubber in 2011-12 to enable bulk users tide over a domestic shortfall.
Natural rubber prices may fall this week
Written by HMH | October 5, 2011 | 0 |
Reuters - Natural rubber prices in India are likely to ease this week, as weakness in the world market is seen overshadowing lower spot supplies at home and top producer Thailand’s decision to trim supplies, dealers said.
The benchmark November rubber on India’s National Multi-Commodity Exchange (NMCE) provisionally ended 0.3 per cent up at Rs 20,680 a quintal.
On Tuesday, price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala was steady at Rs 20,850 a quintal. In Bangkok, Thailand, the spot price fell by Rs 54 to Rs 20,299 a quintal.
“Apart from the local demand-supply situation, international fundamentals are also affecting prices. Volatility in financial markets and falling crude oil are likely to pull down domestic rubber prices,” said Ibrahim Jalal, treasurer, All India Rubber Dealers Federation.
Excessive rain in Kerala, the country’s top producer, had hampered the tapping process earlier this month.
Tapping has gained pace as the weather is now dry in Kerala, but supplies will rise significantly only after a week, Jalal said.
Tokyo rubber futures ended higher on Tuesday as players bought back contracts and pushed the price back above major support at 300 yen, encouraged by the announcement of plans by Thailand to cut supply to prop up the market, dealers said.
Top rubber producer Thailand aims to cut output by 3.5 per cent this year and will urge Indonesia and Malaysia to follow suit in a bid to prop up prices, which have fallen about a third since hitting a record in February, industry officials said on Tuesday.
The International Rubber Consortium has asked Thailand, Indonesia and Malaysia to curb exports if prices fall further in the wake of a global economic slowdown, a senior Thai official said last week.
Thailand, Indonesia and Malaysia, which together account for about 70 per cent of global rubber output, agreed in December 2008 to slash exports and refrain from selling at below $1.35 a kg, following a 60 per cent drop in prices.
India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
October 8, 2011
Kolkata, Oct 8 (IANS) Work at tyre-maker Dunlop’s factory in Sahagunj area of West Bengal’s Hooghly district was suspended Saturday, five months after a similar temporary shut down in April.
The management of the factory put up suspension of work notice at the factory gate Friday night. About 900 workers are employed at the unit.
The management earlier declared suspension of work at the factory in April this year. Following demonstrations by trade unions, it withdrew the notice and asked the workers to join duty after a few days.
In the notice, the Ruia group company said: ‘The management had invested huge amount of money for the revival of the Sahagunj plant. But with the indulgence of some anti-socials, a section of recalcitrant workers resorted to disruptive activities, including vandalism.’
The management also cited other reasons like ‘exorbitant conversion cost, hefty increase in raw material prices without corresponding increase in tyre prices, continuous losses and cash crunch’ for its inability to run the factory.
It also claimed that the company had no liability to pay wages to the workers during the period of suspension of operation.
Malaysia says 2012 palm oil, rubber output to grow on higher acreage, replanting
Written by HMH | October 7, 2011 | 0 |
KUALA LUMPUR, Oct 7 (Reuters) – Malaysia’s palm oil and rubber production may expand next year on improving yields and higher acreage, the government said in its annual economic report on Friday.
Crude palm oil output in the world’s second largest producer could rise 2.2 percent to 18.7 million tonnes from a projected 18.3 million tonnes in 2011 due to aggressive replanting, the Finance Ministry said in the 2011/2012 economic report.
For the first eight months of this year, Malaysia produced 12 million tonnes of the tropical oil amid signs of weakening yields due to the after effects of El Nino-driven hotter weather in 2010.
By comparison, top palm oil producer Indonesia is expected to produce 23 million tonnes this year on faster expanding acreage.
“The oil palm industry is forecast to grow 7.1 percent over the next five years, driven by further gains in average productivity,” said the report that was issued during Malaysia’s budget presentation.
“Meanwhile, efforts have been intensified to increase rubber productivity to reach the target of two million tonnes output by 2020.”
As the third biggest rubber producer after Thailand and Indonesia, Malaysia is set to harvest 1.04 million tonnes of natural rubber next year, slightly higher than the 1 million tonnes seen for 2011.
That amount is less than a third of Thailand’s rubber production, which projected to rise to 3.35 million tonnes this year, as Malaysian farmers prefer to plant lucrative oil palms.
The report said Malaysia’s oil palm acreage will rise 4.1 percent to 5.1 million hectares this year from 4.9 million hectares in 2010. Land under rubber was likely to expand 2.7 percent to 1.1 million hectares this year from last year.
The acreage expansion for both commodities are due to the opening up of new areas in Sabah and Sarawak states on Borneo island, the report said.
The government currently has a target to open up 30,000 hectares of land annually in both these regions for rubber.
OPTIMISTIC 2011 OUTLOOK FOR COMMODITY PRICES
The economic report said the recent price discount of crude palm oil to soy oil of about $200 a tonne would help sustain demand. Palm oil prices are expected to average 3,200 ringgit ($1,004) this year, up 18.5 percent from last year.
Average prices on the Bursa Malaysia Derivatives Exchange so far this year stand at 3,300 ringgit and traders say there may be some declines if investors continue to sell on concerns the euro zone debt crisis may plunge the world into a recession.
Prices of Standard Malaysian Rubber (SMR) 20 are likely to remain firm and average 13.00 ringgit per kg this year compared to 10.58 ringgit last year.
“The favourable price was supported by stronger demand, particularly from China as well as tight supply due to lower output from Thailand,” the report said.
“Global tyre demand is envisaged to expand at a faster pace, led by strong vehicle sales in China which will help sustain rubber prices.”
India: Rubber imports to slip on weak rupee
Written by HMH | October 5, 2011 | 0 |
New Delhi: India’s natural rubber imports are set to slump in the fiscal year through March 2012, as a weakening rupee has made overseas purchases dearer for tyre makers, worsening a demand slowdown on persistent worries about a wobbly economy.
India, which overtook the US as the world’s second-largest natural rubber consumer last year, will likely import around 1,25,000 tonne of natural rubber in 2011-12, down nearly 30% from a year earlier, government and industry sources said on Wednesday. The imports dipped 11% to 76,116 tonne between April and August, compared with 85,058 tonne a year earlier, data by the state-run Rubber Board showed.
Earlier this year, the government cut the import tax on natural rubber to an effective 7.5% from 20% to boost supplies for tyre makers that were struggling to cope with a shortage of the raw material.
The Automotive Tyre Manufacturers’ Association, members of which account for around 90% of the country’s tyre output, had initially projected a shortfall of around 2,00,000 tonne in 2011-12, expecting higher demand from the country’s booming automobiles sector.
Tyremakers account for more than 60% of the country’s natural rubber demand. India, also the world’s fourth-largest natural rubber producer, expects output to rise 4.6% to 9,02,000 tonne this fiscal, according to the Rubber Board’s forecast.
“Although international prices have softened recently, the rupee has depreciated sharply in recent months. Vehicle sales are also falling during the peak rubber producing season. So imports have been affected,” said Rajiv Budhraja, the director-general of Atma.
The rupee has depreciated by more than 8% since September as investors relied on the haven appeal of the dollar amid the financial crisis, making overseas purchases unattractive for Indian companies. Domestic natural rubber prices of the popular RSS-4 variety were ruling slightly higher at around R2,08,500 per tonne on Tuesday from R1,99,720 a tonne in key supplier Thailand for a comparable variety.
Passenger vehicle sales, including cars, vans and sport utility vehicles, fell 5.7% in August, the second fall in two-and-a-half years, as rising interest costs bite into demand, aiding a fall in imports.
A senior executive with a tyre company said adequate rubber stocks with some companies have prevented massive overseas purchases by them, especially in times of economic uncertainties. The Rubber Board forecasts stocks at 2,71,000 tonne by the end of the 2011-12 fiscal.
India was one of the few countries where consumption rose at a much faster pace in 2010-11 than output because of surging demand for automobiles, driving up prices by more than 50% from a year earlier. Earlier this year, the commerce ministry had even proposed to the revenue department of the finance ministry to allow tax-free imports of up to 1,50,000 tonne of natural rubber in 2011-12 to enable bulk users tide over a domestic shortfall.
Natural rubber prices may fall this week
Written by HMH | October 5, 2011 | 0 |
Reuters - Natural rubber prices in India are likely to ease this week, as weakness in the world market is seen overshadowing lower spot supplies at home and top producer Thailand’s decision to trim supplies, dealers said.
The benchmark November rubber on India’s National Multi-Commodity Exchange (NMCE) provisionally ended 0.3 per cent up at Rs 20,680 a quintal.
On Tuesday, price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala was steady at Rs 20,850 a quintal. In Bangkok, Thailand, the spot price fell by Rs 54 to Rs 20,299 a quintal.
“Apart from the local demand-supply situation, international fundamentals are also affecting prices. Volatility in financial markets and falling crude oil are likely to pull down domestic rubber prices,” said Ibrahim Jalal, treasurer, All India Rubber Dealers Federation.
Excessive rain in Kerala, the country’s top producer, had hampered the tapping process earlier this month.
Tapping has gained pace as the weather is now dry in Kerala, but supplies will rise significantly only after a week, Jalal said.
Tokyo rubber futures ended higher on Tuesday as players bought back contracts and pushed the price back above major support at 300 yen, encouraged by the announcement of plans by Thailand to cut supply to prop up the market, dealers said.
Top rubber producer Thailand aims to cut output by 3.5 per cent this year and will urge Indonesia and Malaysia to follow suit in a bid to prop up prices, which have fallen about a third since hitting a record in February, industry officials said on Tuesday.
The International Rubber Consortium has asked Thailand, Indonesia and Malaysia to curb exports if prices fall further in the wake of a global economic slowdown, a senior Thai official said last week.
Thailand, Indonesia and Malaysia, which together account for about 70 per cent of global rubber output, agreed in December 2008 to slash exports and refrain from selling at below $1.35 a kg, following a 60 per cent drop in prices.
India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
Thursday, October 6, 2011
Natural rubber prices may fall this week
Natural rubber prices may fall this week
October 5, 2011
Reuters - Natural rubber prices in India are likely to ease this week, as weakness in the world market is seen overshadowing lower spot supplies at home and top producer Thailand’s decision to trim supplies, dealers said.
The benchmark November rubber on India’s National Multi-Commodity Exchange (NMCE) provisionally ended 0.3 per cent up at Rs 20,680 a quintal.
On Tuesday, price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala was steady at Rs 20,850 a quintal. In Bangkok, Thailand, the spot price fell by Rs 54 to Rs 20,299 a quintal.
“Apart from the local demand-supply situation, international fundamentals are also affecting prices. Volatility in financial markets and falling crude oil are likely to pull down domestic rubber prices,” said Ibrahim Jalal, treasurer, All India Rubber Dealers Federation.
Excessive rain in Kerala, the country’s top producer, had hampered the tapping process earlier this month.
Tapping has gained pace as the weather is now dry in Kerala, but supplies will rise significantly only after a week, Jalal said.
Tokyo rubber futures ended higher on Tuesday as players bought back contracts and pushed the price back above major support at 300 yen, encouraged by the announcement of plans by Thailand to cut supply to prop up the market, dealers said.
Top rubber producer Thailand aims to cut output by 3.5 per cent this year and will urge Indonesia and Malaysia to follow suit in a bid to prop up prices, which have fallen about a third since hitting a record in February, industry officials said on Tuesday.
The International Rubber Consortium has asked Thailand, Indonesia and Malaysia to curb exports if prices fall further in the wake of a global economic slowdown, a senior Thai official said last week.
Thailand, Indonesia and Malaysia, which together account for about 70 per cent of global rubber output, agreed in December 2008 to slash exports and refrain from selling at below $1.35 a kg, following a 60 per cent drop in prices.
India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
India: Rubber imports to slip on weak rupee
October 5, 2011
New Delhi: India’s natural rubber imports are set to slump in the fiscal year through March 2012, as a weakening rupee has made overseas purchases dearer for tyre makers, worsening a demand slowdown on persistent worries about a wobbly economy.
India, which overtook the US as the world’s second-largest natural rubber consumer last year, will likely import around 1,25,000 tonne of natural rubber in 2011-12, down nearly 30% from a year earlier, government and industry sources said on Wednesday. The imports dipped 11% to 76,116 tonne between April and August, compared with 85,058 tonne a year earlier, data by the state-run Rubber Board showed.
Earlier this year, the government cut the import tax on natural rubber to an effective 7.5% from 20% to boost supplies for tyre makers that were struggling to cope with a shortage of the raw material.
The Automotive Tyre Manufacturers’ Association, members of which account for around 90% of the country’s tyre output, had initially projected a shortfall of around 2,00,000 tonne in 2011-12, expecting higher demand from the country’s booming automobiles sector.
Tyremakers account for more than 60% of the country’s natural rubber demand. India, also the world’s fourth-largest natural rubber producer, expects output to rise 4.6% to 9,02,000 tonne this fiscal, according to the Rubber Board’s forecast.
“Although international prices have softened recently, the rupee has depreciated sharply in recent months. Vehicle sales are also falling during the peak rubber producing season. So imports have been affected,” said Rajiv Budhraja, the director-general of Atma.
The rupee has depreciated by more than 8% since September as investors relied on the haven appeal of the dollar amid the financial crisis, making overseas purchases unattractive for Indian companies. Domestic natural rubber prices of the popular RSS-4 variety were ruling slightly higher at around R2,08,500 per tonne on Tuesday from R1,99,720 a tonne in key supplier Thailand for a comparable variety.
Passenger vehicle sales, including cars, vans and sport utility vehicles, fell 5.7% in August, the second fall in two-and-a-half years, as rising interest costs bite into demand, aiding a fall in imports.
A senior executive with a tyre company said adequate rubber stocks with some companies have prevented massive overseas purchases by them, especially in times of economic uncertainties. The Rubber Board forecasts stocks at 2,71,000 tonne by the end of the 2011-12 fiscal.
India was one of the few countries where consumption rose at a much faster pace in 2010-11 than output because of surging demand for automobiles, driving up prices by more than 50% from a year earlier. Earlier this year, the commerce ministry had even proposed to the revenue department of the finance ministry to allow tax-free imports of up to 1,50,000 tonne of natural rubber in 2011-12 to enable bulk users tide over a domestic shortfall.
KERALA FARMERS WANT TO SELL RUBBER @Rs.500 PER KG.
SEE THESE PHOTOS OF POSTERS AFFIXED ON BACK OF PRIVATE BUSES IN KERALA
Photos:By ATISH KUMAR JAIN 03.10.2011 at 13:00hrs
Location: Busy streets of Kottayam Town
Translation:
Photo 1 and 2:RUBBER WILL FETCH Rs.500.00
Photo 3 and 4:SELLING RUBBER BELOW RS.500.00 IS CRIME
Posters affixed by I.R.M.F.-Kochi
October 5, 2011
Reuters - Natural rubber prices in India are likely to ease this week, as weakness in the world market is seen overshadowing lower spot supplies at home and top producer Thailand’s decision to trim supplies, dealers said.
The benchmark November rubber on India’s National Multi-Commodity Exchange (NMCE) provisionally ended 0.3 per cent up at Rs 20,680 a quintal.
On Tuesday, price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala was steady at Rs 20,850 a quintal. In Bangkok, Thailand, the spot price fell by Rs 54 to Rs 20,299 a quintal.
“Apart from the local demand-supply situation, international fundamentals are also affecting prices. Volatility in financial markets and falling crude oil are likely to pull down domestic rubber prices,” said Ibrahim Jalal, treasurer, All India Rubber Dealers Federation.
Excessive rain in Kerala, the country’s top producer, had hampered the tapping process earlier this month.
Tapping has gained pace as the weather is now dry in Kerala, but supplies will rise significantly only after a week, Jalal said.
Tokyo rubber futures ended higher on Tuesday as players bought back contracts and pushed the price back above major support at 300 yen, encouraged by the announcement of plans by Thailand to cut supply to prop up the market, dealers said.
Top rubber producer Thailand aims to cut output by 3.5 per cent this year and will urge Indonesia and Malaysia to follow suit in a bid to prop up prices, which have fallen about a third since hitting a record in February, industry officials said on Tuesday.
The International Rubber Consortium has asked Thailand, Indonesia and Malaysia to curb exports if prices fall further in the wake of a global economic slowdown, a senior Thai official said last week.
Thailand, Indonesia and Malaysia, which together account for about 70 per cent of global rubber output, agreed in December 2008 to slash exports and refrain from selling at below $1.35 a kg, following a 60 per cent drop in prices.
India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
India: Rubber imports to slip on weak rupee
October 5, 2011
New Delhi: India’s natural rubber imports are set to slump in the fiscal year through March 2012, as a weakening rupee has made overseas purchases dearer for tyre makers, worsening a demand slowdown on persistent worries about a wobbly economy.
India, which overtook the US as the world’s second-largest natural rubber consumer last year, will likely import around 1,25,000 tonne of natural rubber in 2011-12, down nearly 30% from a year earlier, government and industry sources said on Wednesday. The imports dipped 11% to 76,116 tonne between April and August, compared with 85,058 tonne a year earlier, data by the state-run Rubber Board showed.
Earlier this year, the government cut the import tax on natural rubber to an effective 7.5% from 20% to boost supplies for tyre makers that were struggling to cope with a shortage of the raw material.
The Automotive Tyre Manufacturers’ Association, members of which account for around 90% of the country’s tyre output, had initially projected a shortfall of around 2,00,000 tonne in 2011-12, expecting higher demand from the country’s booming automobiles sector.
Tyremakers account for more than 60% of the country’s natural rubber demand. India, also the world’s fourth-largest natural rubber producer, expects output to rise 4.6% to 9,02,000 tonne this fiscal, according to the Rubber Board’s forecast.
“Although international prices have softened recently, the rupee has depreciated sharply in recent months. Vehicle sales are also falling during the peak rubber producing season. So imports have been affected,” said Rajiv Budhraja, the director-general of Atma.
The rupee has depreciated by more than 8% since September as investors relied on the haven appeal of the dollar amid the financial crisis, making overseas purchases unattractive for Indian companies. Domestic natural rubber prices of the popular RSS-4 variety were ruling slightly higher at around R2,08,500 per tonne on Tuesday from R1,99,720 a tonne in key supplier Thailand for a comparable variety.
Passenger vehicle sales, including cars, vans and sport utility vehicles, fell 5.7% in August, the second fall in two-and-a-half years, as rising interest costs bite into demand, aiding a fall in imports.
A senior executive with a tyre company said adequate rubber stocks with some companies have prevented massive overseas purchases by them, especially in times of economic uncertainties. The Rubber Board forecasts stocks at 2,71,000 tonne by the end of the 2011-12 fiscal.
India was one of the few countries where consumption rose at a much faster pace in 2010-11 than output because of surging demand for automobiles, driving up prices by more than 50% from a year earlier. Earlier this year, the commerce ministry had even proposed to the revenue department of the finance ministry to allow tax-free imports of up to 1,50,000 tonne of natural rubber in 2011-12 to enable bulk users tide over a domestic shortfall.
KERALA FARMERS WANT TO SELL RUBBER @Rs.500 PER KG.
SEE THESE PHOTOS OF POSTERS AFFIXED ON BACK OF PRIVATE BUSES IN KERALA
Photos:By ATISH KUMAR JAIN 03.10.2011 at 13:00hrs
Location: Busy streets of Kottayam Town
Translation:
Photo 1 and 2:RUBBER WILL FETCH Rs.500.00
Photo 3 and 4:SELLING RUBBER BELOW RS.500.00 IS CRIME
Posters affixed by I.R.M.F.-Kochi
Wednesday, October 5, 2011
Rubber Output Forecast Revised Up to 10 Million Tons
Photos:By ATISH KUMAR JAIN 03.10.2011 at 13:00hrs
Location: Busy streets of Kottayam Town
Translation:
Photo 1 and 2:RUBBER WILL FETCH Rs.500.00
Photo 3 and 4:SELLING RUBBER BELOW RS.500.00 IS CRIME
Posters affixed by I.R.M.F.-Kochi
Rubber Output Forecast Revised Up to 10 Million Tons
October 3, 2011
Oct. 3 (Bloomberg) — Rubber production this year may gain more than previously estimated, boosted by increased output from China, Indonesia and Malaysia, according to the Association of Natural Rubber Producing Countries.
Production from its members, representing 92 percent of global supply, is projected to grow 5.6 percent to 10 million metric tons, the group said in a monthly bulletin today. It had earlier forecast a rise of 5 percent to 9.96 million tons.
“Although the supply shows a marginal improvement compared with what was previously assessed, concerns over availability of natural rubber still persist,” said Jom Jacob, a senior economist at the Kuala Lumpur-based association.
Rubber futures have lost 27 percent this year amid concerns that a slowing U.S. economy and deepening European debt crisis may curb demand for the commodity used for tires and gloves. “While the natural rubber market may continue to stay fragile in the short-term due to exogenous factors, the demand-supply situation can hold the price,” Jacob said.
Output growth in the third quarter was revised up to 6.1 percent from 3.3 percent earlier, according to the group.
Consumption in China, India and Malaysia, which account for 45 percent of the global demand, is likely to expand 2.7 percent in the third quarter, an improvement from a contraction of 1 percent and 4.2 percent in the previous two quarters, it said.
Market on Oct 3: Mixed trend in rubber
Written by HMH | October 3, 2011 | 0 |
KOTTAYAM, OCT. 3:
Physical rubber prices showed a mixed mood on Monday. The market opened weak but regained strength in major counters as domestic futures recovered the initial losses on late trades.
The overall sentiments were bearish, while the remaining grades including latex lost mainly on buyer resistance.
With peak production season on and climatic conditions improving, gains will be limited though the projected demand-supply deficit and falling inventories in warehouses might cushion a fall.
As China goes for a week-long holiday starting Monday, activities are expected to be dull during the week in the global scene.
Sheet rubber closed unchanged at Rs 209 a kg according to traders.
The grade dropped to Rs 208.50 (209.50) a kg both at Kottayam and Kochi as quoted by the Rubber Board.
RSS 4 improved at its October series to Rs 209.50 (208.82), November to Rs 205.70 (205.04), December to Rs 207.40 (206.36), January to Rs 208.50 (207.06) and February to Rs 209.55 (209) a kg on the National Multi Commodity Exchange. RSS 3 (spot) slipped to Rs 203.53 (207.33) a kg at Bangkok.
The October futures declined to ¥294 (Rs 188.15) from ¥301.8 a kg during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 209 (209); RSS-5: 206 (206); ungraded: 197 (198); ISNR 20: 201 (203) and latex 60 per cent: 130.50 (131).
Thailand to cut rubber supply to prop up prices
Written by HMH | October 4, 2011 | 0 |
* Top producer to cut rubber supply by uprooting trees
* Some traders see small impact on prices from this
* Prices may recover due to fundamental factors this year (Adds details and comment)
By Apornrath Phoonphongphiphat
BANGKOK, Oct 4 (Reuters) – Thailand, the world’s biggest rubber producer and exporter, plans to cut annual rubber supply by 120,000 tonnes and will ask other major producers to take action to help prop up prices, senior government and industry officials said on Tuesday.
“We aim to cut rubber supply to push up prices by encouraging farmers to cut down and replant rubber trees on 400,000 rai (64,000 hectares), starting from now, and we would ask for cooperation from Indonesia and Malaysia to take similar action,” said Jirakorn Kosaisawe, director general of the Department of Agriculture.
That would equate to a drop of around 120,000 tonnes in output, said Pongsak Kerdvongbundit, president of the Thai Rubber Association.
Trees take up to seven years to mature and produce latex after planting.
Pongsak said the usual drop in supply during the upcoming dry season together with the replanting plan should stop the benchmark Thai rubber sheet (RSS3) falling below $4.0 per kg this year.
It stood at $4.1 on Tuesday, having fallen from a record $6.4 in February.
Jirakorn said the government would pay farmers 16,000 baht ($512) per rai (0.16 hectare), up from the current 11,000 baht, to encourage them to cut down ageing rubber trees.
“We already have the money collected on rubber exports, around 15 billion baht, so we can start the plan right away,” Jirakorn said, referring to the so called “cess money levy”.
The cess levy is money collected from exporters at progressive rates depending on the price. It goes into the Rubber Plantation Aid Fund, which pays farmers compensation to support them until their trees are mature.
Some traders were sceptical the plan would work. A similar measure was announced at the end of 2008, when the rubber price had fallen to its lowest in nearly seven years at $1.1 per kg.
“We’re getting used to this sort of measure and I don’t think it will have a big impact on prices. You can see that the top producers did not really impose the measure in 2009 and rubber prices rebounded finally because of fundamental factors, supply and demand,” said a trader in Thailand’s Hat Yai rubber centre.
In 2008, Thailand committed itself to cutting down and replanting rubber trees on 64,000 hectares to cut supply in 2009. Indonesia and Malaysia announced similar plans.
However, it eventually cut down only 16,000 hectares as prices had rebounded by mid-2009, meaning farmers preferred to keep on tapping rather than lose trees.
Traders said physical rubber prices could easily rally now due to the seasonal drop in supply in the final quarter and the prospect of strong demand in Asia.
($1 = 31.215 Thai Baht)
Thai Govt, Exporters Meet on Ways To Stabilise Rubber
Written by HMH | October 4, 2011 | 0 |
The Thai government is in an emergency meeting with exporters to look at ways of stabilising rubber prices, senior industry and government officials said on Tuesday (Oct 4).
Thailand is the world’s biggest producer and exporter of rubber. The price of its benchmark smoked rubber sheet has fallen around 35 percent to $4.1 per kg on Tuesday (Oct 4) from a record high of $6.4 per kg in February.
“We are trying to find some measures to prevent prices falling further,” said Pongsak Kerdvongbundit, president of the Thai Rubber Association told Reuters.
A senior government official said any measures that this meeting came up with would be implemented in Thailand only.
(Reuters, October 4, 2011)
Monday, October 3, 2011
Kerala Rubber farmers expect Rs.500 for a kg of Raw Rubber
Photos:By ATISH KUMAR JAIN 03.10.2011 at 13:00hrs
Location: Busy streets of Kottayam Town
Translation:
Photo 1 and 2:RUBBER WILL FETCH Rs.500.00
Photo 3 and 4:SELLING RUBBER BELOW RS.500.00 IS CRIME
Posters affixed by I.R.M.F.-Kochi
Inflation may come down as commodity prices dive
Inflation may come down as commodity prices dive
October 1, 2011
CHENNAI: Commodity prices are on a downhill drive – a glimmer of hope for Indian manufacturers and exporters amid rising inflation, interest rates. Almost all base metals – copper, nickel, aluminium, lead, zinc and tin – are trading at their calendar year lows, triggered by projections of a tepid economic growth in the West. However, the benefit of lower prices has been negated by depreciation in rupee.
Economists said that the falling commodity prices are a good augury for Indian economy as a whole. “A fall in prices will drive down inflation, which in turn soften interest rates and increase profitability margins. We cannot see all these happening very fast, but these are good tidings, at least for now,” said Abheek Barua, chief economist of HDFC Bank.
Lower commodity prices will have a direct impact on profit margins. “Companies engaged in metals mining may not benefit but those who are net commodity importers will benefit. Global prices are bogged down long term pessimism of global economic prospects and we see the falling price trend to continue in the coming months,” Barua said.
The London Metals Exchange prices of copper, a metal for which India is a net importer, have dropped from $9,868 a tonne in February this year to $9,001 a tonne in August. It was trading around $7,000 at LME on Friday. Aluminium prices have softened to $2,379 a tonne in August from $2,678 in April. Nickel fell to $21,845 a tonne from $28,252 in February. Lead prices fell to 239.70 cents/ kg in August from 270.1 cents in April.
“The drop in commodity prices is definitely good news for consumer goods industries like durable and automobiles manufacturers. Even electrical goods makers stand to benefit, but not the metal companies. The advantage of falling prices at LME is negated by rupee depreciation as the landed cost of these metals will not be substantial,” said Anjani Agrawal, partner and sector leader, (metals & mining), Ernst & Young India.
Export-oriented industries, particularly capital goods exporters, are expected to benefit with lower commodity prices and depreciating rupee.
“While it is generally welcome to have commodity prices come down and surely, over a period of time, this will help.
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Lower commodity prices and a relatively weaker rupee will be good for exports. Given most of our exports are low-cost driven, this will be an advantage,” said Kumar Kandaswami, manufacturing leader for Deloitte in India.
Lower base metal prices will also help large steel/ metal heavy projects which were under pressure on account of the cost of financing. “This should provide some relief,” Kandaswami said.
Another commodity which has seen a crash is rubber. Rubber prices of popular RSS 4 variety inThailand market dropped 33% in eight months. The commodity fell to 464 cents/ kg in September from 618 cents in February. “Rubber is a very sensitive commodity. Today it is cheaper to import tyres than import rubber as our duty structure is designed to please and protect the rubber growers,” said Arun Mammen, MD of MRF, said.
“We have asked for import of duty free natural rubber under the advance authorization scheme,” says Alok K Goyal, deputy secretary general, All India rubber Industries Association. “Since there is severe shortage of natural rubber in the domestic market, future trading only adds to the volatility,” a AIRIA report said.
India has around 4,600 rubber products manufacturing units that employ close to four lakh people, almost all of them in Kerala.
Falling India passenger car sales dampens metals, rubber industry
September 28, 2011
NEW DELHI (Commodity Online): The deceleration in India passenger car sales may impact energy, metals and natural rubber demand in the country. According to CRISIL Research, the fall in growth in car sales can be attributed to soaring petrol prices and hike in the interest rates by the Reserve Bank of India (RBI).
CRISIL Research expects the car sales growth to decline to 2-4% against the earlier forecast of 8-10%.
The domestic market for steel, aluminum, natural rubber may be dampened with the fall in car sales.
Petrol price was raised by 3 rupees to 66.84 per litre (price in Delhi) has been one of the major reason for the sales to go down and also the hike in interest rates to 25 Base Points (bps) by RBI. RBI has raised the interest rates for the 12thtime in a year.
The cost of owning a car has increased significantly by 12-14% due to frequent increases in fuel price and interest rate.
Earlier in 2008, India car sales had touched the lowest 1.4% on global recession. The dealers and the car manufacturers are offering discounts and gift coupons to promote sales but results are not forthcoming.
The demand for diesel cars like Maruti Suzuki –Swift, Swift Dzire, Mahindra Logan and Ford Fiesta has risen. The market for the used diesel cars is also picking up.
October 1, 2011
CHENNAI: Commodity prices are on a downhill drive – a glimmer of hope for Indian manufacturers and exporters amid rising inflation, interest rates. Almost all base metals – copper, nickel, aluminium, lead, zinc and tin – are trading at their calendar year lows, triggered by projections of a tepid economic growth in the West. However, the benefit of lower prices has been negated by depreciation in rupee.
Economists said that the falling commodity prices are a good augury for Indian economy as a whole. “A fall in prices will drive down inflation, which in turn soften interest rates and increase profitability margins. We cannot see all these happening very fast, but these are good tidings, at least for now,” said Abheek Barua, chief economist of HDFC Bank.
Lower commodity prices will have a direct impact on profit margins. “Companies engaged in metals mining may not benefit but those who are net commodity importers will benefit. Global prices are bogged down long term pessimism of global economic prospects and we see the falling price trend to continue in the coming months,” Barua said.
The London Metals Exchange prices of copper, a metal for which India is a net importer, have dropped from $9,868 a tonne in February this year to $9,001 a tonne in August. It was trading around $7,000 at LME on Friday. Aluminium prices have softened to $2,379 a tonne in August from $2,678 in April. Nickel fell to $21,845 a tonne from $28,252 in February. Lead prices fell to 239.70 cents/ kg in August from 270.1 cents in April.
“The drop in commodity prices is definitely good news for consumer goods industries like durable and automobiles manufacturers. Even electrical goods makers stand to benefit, but not the metal companies. The advantage of falling prices at LME is negated by rupee depreciation as the landed cost of these metals will not be substantial,” said Anjani Agrawal, partner and sector leader, (metals & mining), Ernst & Young India.
Export-oriented industries, particularly capital goods exporters, are expected to benefit with lower commodity prices and depreciating rupee.
“While it is generally welcome to have commodity prices come down and surely, over a period of time, this will help.
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Lower commodity prices and a relatively weaker rupee will be good for exports. Given most of our exports are low-cost driven, this will be an advantage,” said Kumar Kandaswami, manufacturing leader for Deloitte in India.
Lower base metal prices will also help large steel/ metal heavy projects which were under pressure on account of the cost of financing. “This should provide some relief,” Kandaswami said.
Another commodity which has seen a crash is rubber. Rubber prices of popular RSS 4 variety inThailand market dropped 33% in eight months. The commodity fell to 464 cents/ kg in September from 618 cents in February. “Rubber is a very sensitive commodity. Today it is cheaper to import tyres than import rubber as our duty structure is designed to please and protect the rubber growers,” said Arun Mammen, MD of MRF, said.
“We have asked for import of duty free natural rubber under the advance authorization scheme,” says Alok K Goyal, deputy secretary general, All India rubber Industries Association. “Since there is severe shortage of natural rubber in the domestic market, future trading only adds to the volatility,” a AIRIA report said.
India has around 4,600 rubber products manufacturing units that employ close to four lakh people, almost all of them in Kerala.
Falling India passenger car sales dampens metals, rubber industry
September 28, 2011
NEW DELHI (Commodity Online): The deceleration in India passenger car sales may impact energy, metals and natural rubber demand in the country. According to CRISIL Research, the fall in growth in car sales can be attributed to soaring petrol prices and hike in the interest rates by the Reserve Bank of India (RBI).
CRISIL Research expects the car sales growth to decline to 2-4% against the earlier forecast of 8-10%.
The domestic market for steel, aluminum, natural rubber may be dampened with the fall in car sales.
Petrol price was raised by 3 rupees to 66.84 per litre (price in Delhi) has been one of the major reason for the sales to go down and also the hike in interest rates to 25 Base Points (bps) by RBI. RBI has raised the interest rates for the 12thtime in a year.
The cost of owning a car has increased significantly by 12-14% due to frequent increases in fuel price and interest rate.
Earlier in 2008, India car sales had touched the lowest 1.4% on global recession. The dealers and the car manufacturers are offering discounts and gift coupons to promote sales but results are not forthcoming.
The demand for diesel cars like Maruti Suzuki –Swift, Swift Dzire, Mahindra Logan and Ford Fiesta has risen. The market for the used diesel cars is also picking up.
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