Natural rubber (NR) prices have almost doubled in a year. The benchmark RSS-4 variety was quoted at Rs 128 a kg today compared with Rs 65 a kg on the same day last year.
The rubber market is now set to break all previous records despite a good production this season. The local market follows its global peers, which has resulted in a sharp increase in prices in the futures market.
In the local market, RSS-4 was quoted at Rs 76.5 a kg on December 3, 2006, and at Rs 92 on the same day in 2007. The highest price quoted was Rs 142 on August 30, 2008.
A section of traders believes the market may breach this record because of the rise in demand, especially from tyre manufacturers. The price rise is unusual as the supply has improved since November.
According to Rubber Board estimates, production in November increased to 103,000 tonnes compared with 95,550 tonnes in the same month last year. The production is expected to be at its peak in December due to the winter season which will further boost supply.
The board has estimated that the total stock in the country has increased to 247,000 tonnes. This is due to the sharp increase in imports and a drop in exports during April-November.
Experts said a strong appreciation in prices in all major global markets would make the domestic market bullish. Heavy rainfall and floods had affected production in Thailand and Indonesia, hence global prices were on a rise. Also, aggressive buying by China made the market a seller’s paradise, they said.
Meanwhile, the cumulative production of the commodity in April-November fell 6.5 per cent to 538,000 tonnes. This was 576,000 tonnes in the same period last year. Its consumption increased by 3.5 per cent to 615,000 tonnes.
(Source: irco.biz)
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