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
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