Asian rubber markets settle mostly higher

Market Review 

NMCE rubber futures dropped for the second successive day on profit taking. Wide spread summer showers in major parts of Kerala triggered hopes of higher arrivals in the coming weeks. 

However other major Asian markets settled mostly higher Wednesday as crude oil prices firm, the yen continued to weaken and tight supply in physical markets. The benchmark September futures on TOCOM settled 0.9% higher at 326.8 yen per kg after hitting a fresh 20 month high of 330.3 yen. 

Rubber in News 

China's state reserve plans to sell 30,000 tonnes of natural rubber on April 14, the country's top economic planning agency said on Wednesday on its website (www.ndrc.gov.cn) The National Development and Reform Commission did not give pricing details, and said potential buyers should apply before April 13. 

The state reserve is offering rubber that has sat in storage for as long as a decade, as well as some that has been water damaged, according to the government document. The offer is unlikely to tame the fast rally in natural rubber prices, as the dry wintering season in Southeast Asia curbed supply and rising oil prices pushed up Tokyo rubber futures. (Reuters reported yesterday.) 

India's natural rubber output fell 3.8% on year to 831,400 tonne in 2009-10 (Apr-Mar), according to the Rubber Board's provisional estimates. Meanwhile, demand for natural rubber rose 6.8% on year to 930,565 tonne from 871,720 tonne. Natural rubber imports rocketed to 170,048 tonne, a record rise of 118.7% on year. 

Rubber exports plunged 49.4% on year to 23,764 tonne. The unusually dry climate seen in key producer Kerala in Feb-Apr 2009 is the key reason for the fall in output. Kerala accounts for nearly 90% of the total rubber output in the country. 

Although the cumulative output in 2009-10 declined in March, rubber output rose 4.87% on year to 50,650 tonne. Rubber demand rose 7.14% to 79,500 tonne from 74,200 tonne in March, while imports climbed to 10,136 tonne from 6,737 tonne. Rubber exports in March also increased to 5,615 tonne from 1,962 tonne. According to the Board's estimates, the inventory level as on Mar 31 was 248,000 tonne, as against 196,230 tonne a year ago. 

Courtesy: JRG Wealth Management Ltd. 

(commodityonline.com)