Tokyo futures end 1 pct lower, euro debt worries linger
December 13, 2011
SINGAPORE, Dec 13 (Reuters) – Tokyo rubber futures extended losses on Tuesday as equities and other commodities fell after a European Union summit aimed at solving the region’s deteriorating debt crisis failed to restore financial market confidence. Stocks in Asia plunged and the euro languished near a two-month low as investors took fright at the prospect of mass euro zone sovereign ratings downgrades after the outcome of a “last chance” EU summit was unable to convince markets. The most active Tokyo Commodity Exchange rubber contract for May delivery ended 2.8 yen a kg lower at 274.6 yen after hitting an intraday low at 272.2 yen. The contract plunged to a near 2-year low of around 248 yen in November.
“For this week, I think the concern is more on the European debt crisis. Rubber is more likely to track macroeconomics changes,” said Ker Chung Yang, analyst at Phillip Futures in Singapore. “Coming to the year-end, I would expect the physical market to go quieter,” said Ker, who pegged support levels at 248 and 250 yen.
In the physical market, Indonesia’s SIR20 tyre grade changed hands at 154.50 U.S. cents a pound ($3.41 a kg) for February shipment. Offers were limited in Southeast Asia after a combination of dry and wet weather curbed supply in Thailand, Indonesia and Malaysia. The Indonesia Commodity & Derivative Exchange (ICDX) is planning to launch a physical rubber contract following talks with the International Tripartite Rubber Council, but timescale and details had yet to be decided. In other commodities, gold fell to its lowest in seven weeks, London copper extended losses, while Brent crude was little changed after falling in the previous session on worries that last week’s pact by European leaders may not be enough to limit the region’s debt crisis.
Major rubber growers may back physical market in benchmark drive
December 12, 2011
AKARTA: Thailand, Indonesia and Malaysia, which account for about 70% of natural-rubber output, plan to set up a regional physical market to create a new benchmark for the commodity, according to a trade group.
The market would help producers trade with more transparent and reliable prices, Tjahjono Budiarto Tjandra, chairman of the Committee on Strategic Market Operations at the International Rubber Consortium, said in an interview in Bali on Monday.
The countries agreed to take “specific measures” to support prices, Bayu Krisnamurthi, Indonesia’s deputy trade minister, told reporters in Bali after a meeting of representatives from the three governments. Rubber has slumped in Tokyo this year as Europe’s debt crisis raised concern that demand may drop.
The Tokyo Commodity Exchange, which trades that benchmark, is tracking the contract plan. The initiative may involve the Indonesia Commodity & Derivatives Exchange, the Agricultural Futures Exchange of Thailand and the Malaysia Derivatives Exchange, Tjandra said.
“We’re ready to start the rubber contract next year,” Megain Widjaja, chief executive officer of the Indonesia Commodity & Derivatives Exchange, or ICDX, said in an interview. The three Southeast Asian exchanges and the consortium met in Phuket, Thailand last month to discuss the plan, Widjaja said.
“Although the current rubber price has declined from early 2011, it is still quite high,” Bayu said. “We must be ready for any situation that may further pressure the price.” Rubber futures in Tokyo are set for their worst annual performance since 2008, when the global economic recession reduced demand.
The contract for delivery in May closed at 277.4 yen per kg on Tocom on Monday. “We will closely watch the development of the issue,” said Fuminori Kondo, a spokesman for Tocom.
“We’ve heard similar ideas before. As the three producing countries represent 70% of global rubber output, the idea is interesting to us as our bourse trades rubber futures.”The Agricultural Futures Exchange of Thailand welcomed the rubber plan, which merits further study, according to Chairman Prasat Kesawapitak.
“The initiative also needs support from the government to help stabilize the price.” The International Tripartite Rubber Council - which represents growers and exporters from Thailand, Indonesia and Malaysia – last month encouraged members to blacklist buyers who default on purchases. Members may curb exports if necessary to limit supply and boost prices, the group said on November 19.
“There’s a desire from the governments of the three countries to set up a market as soon as possible that would be based on the real supply-and-demand fundamentals,” said Tjandra from the consortium, which represents growers and exporters from Thailand, Indonesia and Malaysia. The contract would most likely trade in dollars, he said.
Market on Dec 12: Spot rubber rules steady
December 12, 2011
KOTTAYAM, DEC. 12:
Spot rubber continued to rule unchanged on Monday. Sentiments were almost neutral following a weak closing in domestic futures on the National Multi Commodity Exchange (NMCE).
According to sources, the market remained under pressure on comparatively higher imports and slightly increased supplies above the Rs 200-mark. Imports showed a rise of almost five per cent in November, while exports went up to 580 tonnes compared with 60 tonnes during the same period last year, they added.
Sheet rubber finished steady at Rs 202 a kg, according to traders. It was flat at Rs 201.50 a kg both at Kottayam and Kochi, as reported by the Rubber Board.
In futures, the December series slipped to Rs 201.20 (202.98), January to Rs 202.50 (205.01), February to Rs 204.50 (207.19), March to Rs 207.65 (209.75), April to Rs 211.51 (214.63) and May to Rs 213.51 (216.50) a kg for RSS 4 on the NMCE.
The December futures increased to ¥263.4 (Rs 178.28) from ¥260.3 a kg during the day session but then dropped to ¥260 (Rs 176.01) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 202 (202); RSS-5: 199 (199); ungraded: 193 (193); ISNR 20: 189 (189) and latex 60 per cent: 111 (110).
India: Natural rubber demand-supply gap narrows
December 13, 2011
The gap between production and consumption of natural rubber (NR) narrowed in November. Though consumption grew at a much lower pace than production, the gap at November-end fell to 57,515 tonnes from 70,725 tonnes in April-October.
During April-November, consumption increased 0.7 per cent due to the economic slowdown and the euro zone crisis, while production increased 4.9 per cent. Still, there was a marginal increase of 0.2 per cent in the cumulative consumption in April-October.
Average consumption during April-November increased to 632,615 tonnes, as against 628,240 tonnes in the same period of the last financial year. According to provisional figures of the Rubber Board, total production increased 4.9 per cent to 575,100 tonnes as against 548,150 tonnes.
Production of NR in November increased 4.3 per cent to 94,400 tonnes compared to 90,500 tonnes during November 2010. Monthly consumption increased seven per cent to 82,000 tonnes compared to 78,010 tonnes.
Tyre sector hit
Most tyre companies in India are facing severe problems on the demand side, due to low automobile sales. This caused a drastic reduction in the demand from the original equipment (OE) segment for the last few months. Industry sources said the improvement is not an indication of better status of rubber-based industries.
Leading rubber dealer and former president of the Cochin Rubber Merchants Association, N Radhakrish-nan said tyre production had picked up pace marginally, but the non-tyre sector was still under pressure. The slight increase in consumption is because of the improvement in tyre production.
Tyre companies are buying rubber as prices are comparatively low now. But, the crisis of small and medium non-tyre units is continuing and a large number are on the verge of closure, he said. According to information from the All-India Rubber Industries Association, 500 such units have shut shop.
According to Rajiv Budh-raja, director general, Autom-otive Tyre Manufacturers’ Association, the slowdown in the tyre sector continues. Tyre production increased seven per cent in April-October as against a double-digit increase in the same period last year. The production of truck/bus tyres was flat, while car tyre output increased three per cent. Radhakrishnan said prices would move on a steady note as rich farmers are holding stock for better price realisation. Also, global supply is low due to poor production in Thailand, the world’s largest NR producer, due to rain and floods. Supply is expected to fall 5.6 per cent in 2011.
Import, exports
Though the local market is not having enough rubber and the prices abroad are lower than in India, imports have declined in the current year. Total imports during April-November were 111,899 tonnes as against 152,658 tonnes in the same period of last year.
Meanwhile, exports were up 430 per cent to 20,784 tonnes as against 4,798 tonnes in the same period last year.
India rubber seen steady on supply, rupee
December 13, 2011
Dec 13 (Reuters) – Natural rubber prices in India are likely to tread water this week due to steady supplies and as a depreciating Indian rupee is nullifying the benefit of buying from overseas markets, analysts said.
At 3:35 p.m on Tuesday, the benchmark January rubber on India’s National Multi-Commodity Exchange (NMCE) was 0.1 percent down at 20,249 rupees per 100 kg.
The price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kochi market in Kerala fell 103 rupees to 20,067 rupees per 100 kg.
Spot price in Bangkok, Thailand, was 18,025 rupees on Tuesday.
“Taping is going on in full swing, but it is not materialising in rubber supplies in the same proportion. Supplies are steady,” said Jose Mambarambil, vice-president at Indian Rubber Dealers’ Federation (IRDF).
“Farmers are storing latex in drums after tapping. Due to labour shortage, they are finding it difficult to make rubber sheets. Besides, many farmers are holding supplies hoping prices will rise after January,” he said.
Rubber production in India peaks during Oct-Jan.
Tyre makers were aggressively signing import deals but pace may falter in coming weeks due to a weak rupee, Mambarambil said.
India’s natural rubber imports edged up 4.6 percent in November to 15,069 tonnes, the state-run Rubber Board said on Dec. 9, and steep price fall in overseas markets is likely to continue to make imports attractive for tyre makers.
The country’s production during the month rose 4.3 percent on a year ago to 94,400 tonnes, while consumption was 82,000 tonnes compared with 78,010 tonnes a year ago, it said.
India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
Tokyo rubber futures extended losses on Tuesday as equities and other commodities fell after a European Union summit aimed at solving the region’s deteriorating debt crisis failed to restore financial market confidence.
The Indian rupee slumped to an all-time low of 53.52 to the dollar on Tuesday.
India’s tyre output growth is likely to almost halve in the fiscal year ending March 2012 to 12 percent, as vehicle sales slowed because of higher interest rates, hitting demand from automakers, a senior industry official said on Sept. 9.
The country’s production for the current financial year is estimated at 902,000 tonnes and consumption at 977,000 tonnes. (Reporting by Rajendra Jadhav; Editing by Rajesh Pandathil)
India: CM pushing for a hike in subsidy for rubber growers
December 14, 2011
KOTTAYAM: Support for Rubber Producers Societies (RPS) from local self-government bodies and panchayats was under the consideration of the state government, chief minister Oommen Chandy said here on Tuesday. He was inaugurating the year-long silver jubilee celebrations of RPS at the Mammen Mappilai Hall. here.
“The government is seriously considering giving support to RPS from a share of project funds,” he said. He also said that the Planning Board had taken a decision regarding that in 2005 but an approval did not come from the government then. “Now the matter is back with the Planning Board,” he said. Higher Subsidy
Chandy said that his government had brought the issues faced by rubber planters to the attention of the central government. “The most important recommendation is about the subsidy given for replanting of rubber. This amount was fixed years ago and is still the same. Considering the expenses connected with farming these days, that amount is meagre. The Rubber Board has recommended increase of the subsidy to Rs 50,000. The state government has requested the Centre to consider this demand of the board as one from the state itself,” said Chandy.
He said that the agricultural sector was the strength of the state and rubber occupied a prominent place in it. He lauded the Rubber Board for playing an active role in achieving that place. Revenue minister Thiruvanchoor Radhakrishnan presided over the function. Sheela Thomas IAS, chairman, Rubber Board, welcomed the gathering.
The chief minister presented the Suvarna Sangham Award for the best RPS to Chirakadavu RPS. Thiruvanchoor Radhakrishnan presented the citation and handed over the cash award to K E Chacko, president of RPS.
Rubber Board Member Joseph Vazhackan MLA presented the farmer innovation award to Abraham Anchani for having developed the tapping shade.
P C Cyriac IAS (Rtd.), former Chairman, Rubber Board introduced the concept of RPS to the meeting. P Mukundan Menon, former Rubber Production Commissioner introduced the best RPS selected for the award, to the gathering.
The Chief Minister honoured P C Cyriac, P Mukundan Menon and Dr A K Krishnakumar while Sreedevi received the award on behalf of her late husband P K Narayanan (former Rubber Production Commissioner) for their valuable services in pushing forward the concept of the RPS in their formative years.
India: Domestic rubber prices surge above Rs 200/Kg
December 13, 2011
KOCHI: Rubber prices have rebounded to above Rs 200 per kg in the local market as tyre manufacturers step up procurement spurred by higher automobile sales.
Growers are willing to release the stock into the market as the current level of price is around Rs 20-25 higher than the international market, which has been hit by the debt crisis in Europe.
Improved sales in the passenger car segment have led tyremakers to make more purchases. Since the local rubber prices were hovering below the Rs 200/kg mark, the growers were reluctant to go on a selling mode. But on December 5, the price of RSS-4 variety, used by the tyremakers, moved up to Rs 201 per kg and it went up to Rs 204 before falling by Rs 3 on selling pressure a few days later.
The tyremakers are exploring both options: they are importing as well as making local purchases. “Even with rupee at Rs 52 a dollar, the imports are more viable at the current level of global prices. We will complete the import quota allowed by the government at reduced duty by the end of December,” said Swaranjit Singh, materials director at JK Tyres, adding that the tyre company is also making use of the peak production season in the domestic market.
The rubber production has grown by 4.9% to 5,75,100 tonne in the April-November period. For the given period, the consumption rose by just 0.7% to 6,32,615 tonne. Unlike the passenger car segment, the demand in OEM and truck tyre sectors has remained subdued. The rubber imports are rising though overall imports for the eight-month period are still down by 26%.
The delay in the landing of imported rubber could have forced tyremakers to buy more from the local market. “They were expecting it in early December but looks like towards the end of the month. The growers are willing to sell above Rs 200 as the international prices are over Rs 20 lower,” said George Valy, president of theRubber Dealers Association.
Wednesday, December 14, 2011
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