MUMBAI: Indian rubber prices, which hit record highs last week, are likely to correct this week tracking weakness in global markets and as reluctant buyers wait for a sharp fall before purchasing, analysts said.
"Buyers are postponing purchase. Prices in international market are falling and tyre-makers are waiting for a fall in domestic prices," said Shiji Abraham, analyst with JRG Wealth Management.
Tokyo rubber futures tumbled to a near-three-week low on Monday, falling sharply from last week's 21-month high as the Goldman Sachs fraud probe unnerved financial markets and lower oil prices added to the pressure on rubber, dealers said.
The benchmark May contract on the National Multi-Commodity Exchange(NMCE) provisionally closed 1.4 per cent down at Rs 16,629 per 100 kg, after hitting a record high of Rs 17,189 last week.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) fell by Rs 250 to Rs 16,700 in Kottayam, Kerala, on Monday, Rubber Board data showed.
The price had hit a record high of Rs 16,950 on Saturday.
Production worries in key producing countries like Thailand and Malaysia will limit the fall in prices, Shiji said.
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 per cent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
India's natural rubber production dropped 3.8 per cent in 2009/10 due to adverse climatic conditions, but a rise in consumption during the period lifted the country's imports, the Rubber Board said.
(economictimes.indiatimes.com)
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