Goodyear Q2 beats estimates but 2nd half a worry

(Reuters) - Goodyear Tire & Rubber Co (GT.N) posted better-than-expected quarterly earnings on Thursday and a profit in its key North American unit, but shares slipped on concerns about the second-half outlook.

Goodyear, whose shares were down 4 percent on Thursday after a run-up of more than 20 percent in July, said the economy remained uncertain and raw materials costs were a challenge but had been more than offset in the quarter by the increased pricing and the sale of a higher percentage of more expensive tires.

"The improving global economy, while certain not to be a straight upward path, will provide the environment to fill our factories," Chief Executive Richard Kramer said on a conference call with analysts.

Kramer also said there would be a "significant footprint action" in North America, but Goodyear has not made any final decisions about potential changes.

Goodyear's four-year contract with the United Steelworkers union last year left jobs at its Union City, Tennessee, plant unprotected while providing job security at six other plants. Union City has about 2,000 jobs.

"The market may have been underestimating the materials cost headwinds the company faces in the second half of the year," CRT Capital Group analyst Kirk Ludtke said.

The question really is whether Goodyear will be able to pass the increases in raw materials to customers, Morningstar analyst Joung Park said.

Goodyear, the largest U.S. tire maker, pushed to a profit in North America after a steep loss a year earlier. The turnaround was due to price increases, sale of a higher percentage of more expensive tires and market share gains on branded consumer replacement tires, the company said.

In Latin America, operating income fell in part due to the Venezuelan currency devaluation, Goodyear said. For the year, the currency devaluation, weaker demand and other factors could pressure operating income by $75 million in the unit, it said.

Goodyear reported net income of $28 million, or 11 cents per share, for the second quarter, compared with a net loss of $221 million, or 92 cents per share, a year earlier. Revenue rose 15 percent to $4.5 billion.

Excluding one-time items, Goodyear reported earnings of 12 cents per share. Analysts, on average, had expected it to earn 5 cents per share, according to Thomson Reuters I/B/E/S.

Goodyear sold 10 percent more tires in the quarter than a year earlier. In general, about two-thirds of Goodyear's tire sales are to the replacement market and one-third to automotive manufacturers for new vehicles, generating lower margins.

In the North American unit, tire sales to manufacturers rose 69 percent in the quarter from the year-earlier period, when the manufacturing shutdowns at General Motors Co GM.UL and Chrysler Group LLC during their government-supported bankruptcies had cut demand.

Shipments of replacement tires in North America rose 2 percent in the quarter from a year earlier.

Goodyear expects raw materials costs in the second half of the year to be less than previously forecast. It expects them to peak in the third quarter, with an increase of 30 percent to 35 percent from a year earlier. It expects fourth quarter raw materials costs to be up about 30 percent from a year earlier.

Goodyear shares were down 52 cents, or 4.4 percent, at $11.43 Thursday afternoon on the New York Stock Exchange.

(reuters.com)

Kerala expects good spice yield

The moderate monsoon in Kerala has been good for most crops and adequate rains has provided the perfect platform for the agriculture sector. According to analysts, this would be a good season for both edible and cash crops.

The progress of the monsoon has enthused natural rubber growers and production is in full swing. Rubber Board sources said production would be up by around 6-7 per cent and the existing high prices will encourage growers to invest in plantations.

Production increased 5 per cent in June to 57,000 tonnes against 54,255 tones in June, 09, according to the latest data.

N Radhakrishnan, former president of Cochin Rubber Merchants Association said production will increase, as tapping is in full swing in major rubber cultivating areas. But the slow pace in re-planting of old trees are serious concerns.

KM Michel, president, Cardamom Growers Association said the rainfall pattern in high ranges is good and spices, especially cardamom and pepper, are expected to have a good yield.

According to his estimates there might be 5-10 per cent increase in production. During the last season, around 10,000 tonnes of cardamom was produced. The high average price (Rs 1500 per kg) has also pushed up nursing of plantations in Idukki district, where nearly 70 per cent of cardamom is produced.

Agriculture officer Benny Kuriakose said the sharp increase in prices of black pepper and a moderate monsoon is also encouraging growers. The total production last season was between 45,000-50,000 tonnes. The harvesting season will begin in December.

Coco is expected to have a good crop. Growers said the monsoon was also favourable for growing nutmeg. An official of the Coconut Development Board told Business Standard that production is likely to increase.

R Anilkumar, a banana planter of Thrissur district said there was minimal damage due to lack of strong winds and a good crop is expected during Onam in August.

After 45 days of ban on trawlers, the fishing sector will be active from 1st August and good seasonal catch is expected. Around 5,000 fishing boats are preparing for a good season.

(business-standard.com)

Rubber Climbs to Two-Week High as Chinese Demand May Expand

By Aya Takada

July 29 (Bloomberg) -- Rubber advanced to a two-week high on speculation that demand in China, the world’s largest consumer, will keep growing after Sumitomo Rubber Industries Ltd. said it will expand tire output in the nation.

Futures in Tokyo climbed as much as 1.9 percent to the highest level since July 12. The price has gained 1 percent in July, heading for the first monthly advance since March.

Sumitomo Rubber, Japan’s second-largest tire maker after Bridgestone Corp., will invest $297 million to set up a factory in Hunan province, the company said in a statement yesterday. It will be the company’s second factory in China and start production in July 2012, it said.

“The news added to expectations that China’s raw-material demand will continue to grow, backed by a rapid expansion in the nation’s economy,” Hisaaki Tasaka, an analyst at broker ACE Koeki Co. in Tokyo, said today by phone.

January-delivery rubber increased as much as 5 yen to 273.6 yen per kilogram ($3,133 a metric ton) on the Tokyo Commodity Exchange before trading at 272 yen at 11:10 a.m. local time.

Gains in futures were limited as Asian stocks extended a global decline after the Federal Reserve said U.S. economic growth slowed in some areas, raising concern that the recovery of the world’s largest economy may weaken.

“Economic activity has continued to increase, on balance, since the previous survey,” the central bank said in its Beige Book business survey, noting that two of the Fed’s 12 districts reported the economy “held steady” and two said the pace of expansion slowed.

‘Unusually Uncertain’

The report underscored the Fed’s view that the recovery, while still moving forward, is progressing at a slower pace than earlier in the year. Fed Chairman Ben S. Bernanke said in congressional testimony last week that the central bank expects “continued moderate growth” and noted that the economic outlook remains “unusually uncertain.”

In the cash market, Thai prices advanced yesterday on speculation that heavy rains in the nation’s rubber-growing southern provinces may limit supply, according to the Rubber Research Institute of Thailand. The price added 0.2 percent to 102.4 baht ($3.18) per kilogram.

January-delivery rubber on the Shanghai Futures Exchange gained 0.9 percent to 23,525 yuan ($3,470) a ton.

(bloomberg.com)

High input costs halve MRF net

CHENNAI: Increased raw material costs, especially natural rubber and employee costs, along with interest charges pulled down MRF’s net profit by 51% to Rs 61.6 crore in the third quarter ended June 30, 2010 against Rs 125.7 crore in the year-ago period. The board has approved the payment of interim dividend of Rs 3 per equity share. 

However, buoyancy in the auto sector and greater demand in the replacement market for tyres helped the company to lift net sales 34.2% to Rs 1,924.4 crore against Rs 1,433.6 crore in the year-ago period. 

The other operating income was less at `96 lakh against Rs 4.7 crore in the year-ago period. In the first nine months, MRF reported a higher net profit of Rs 276.8 crore against Rs 156.1 crore in the same period in the previous year. Net sales improved to Rs 5,345.9 crore against Rs 4,189.6 crore in the year-ago period. 

In the first nine months, the company has surpassed the net profit of Rs 253 crore, reported during the year ending September 30, 2009 on net sales of Rs 5,663.8 crore. 

MRF executive V-P marketing, Koshy Varghese said despite robust sales, the profits took a beating in Q3 due to high cost of natural rubber. During the quarter, consumption of raw materials increased 78% to Rs 1367.1 crore against Rs 766.7 crore in the year-ago period. 

Employees’ cost increased to Rs 102 crore, interest Rs 19.7 crore against Rs 11.5 crore in the year-ago period. Tax liability was lower at Rs 87.5 crore against `188.1 crore in the year-ago period. 

With the Government allowing users to import tyres at lower duty, the company found it difficult to increase the prices to recover the additional cost on inputs and the operational expenses. Stating natural rubber prices in the international market are lower compared with domestic prices, he hoped the government will reduce import duty on material.

(economictimes.indiatimes.com)

Tight supplies to keep rubber prices steady

KOCHI: The global prices of natural rubber will remain steady in the medium term on account of tight supplies and growing demand. 

Abdul Aziz, secretary general, International Rubber Research and Development Board (IRRDB), said the natural rubber situation is not likely to see any significant change in the medium term. 

However, countries like Vietnam, China, Cambodia and Laos are increasing the area under rubber. By the second half of this decade, Vietnam could emerge as a major player surpassing both India and Malaysia, he said. 

Mr Aziz said production in the Asian countries has been affected by labour shortage and climatic changes. An increase in production is also limited by large-scale replanting in the leading producers. Mr Aziz was speaking to ET on the sidelines of the international workshop on ‘Climate Change and Natural Rubber Cultivation Research and Development Priorities’ jointly organised by the Rubber Research Institute of India (RRI) and IRRDB. 

An expert on natural rubber, Mr Aziz was of the view that price stabilisation was not warranted as the current upsurge is shaped by the demand and supply factors. 

Earlier in his keynote address Prof J Sreenivasan of Indian Institute of Science, Bangalore said studies showed that over the years there has been a decline in the rainfall in Kerala, the main rubber producing region. 

Dr James Jacob, director, RRI, in his paper, ‘Impact of Climate Change on Natural Rubber Productivity in Different Agro-climatic Regions in India’, pointed out that the productivity of rubber plantations in the state was on the decline due to rising temperature. 

According to him, a one degree increase in temperature will result in a 15% fall in productivity. It is in this context that the RRI is developing new heat resistant clones of natural rubber. The productivity of NR in the country declined to 1,784 kg per hectare per year in 2009-10 from 1,867 kg during 2008-09.

(economictimes.indiatimes.com)

Rise in spot rubber prices

On Wednesday (28 July 2010), the spot rubber prices rose as the market continued to suffer from short supplies. Sheet rubber increased further to Rs 185 from Rs 183.50 per kg on fresh buying and short covering. Latex 60% declined further due to low demand.

The August futures for RSS 4 declined to Rs 184.02 (184.66), September to Rs 169 (171.86), October to Rs 161.40 (161.71) and November to Rs 160.39 (160.49) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 185 (183.50); RSS-5: 179 (178); ungraded: 169 (168); ISNR 20: 157 (156.50) and latex 60 per cent: 111 (112).

(indiainfoline.com)

IRCo's WEEKLY MARKET SNAPSHOT: 19 - 23 July 2010

IRCo's DCP moved within a range of 2.17 US cents/kg. during the week under review and ended with a slight gain of 0.11 US cents/kg. RSS3 shed 10.73 US cents/kg. as supply picked up in Thailand. Prices for the TSR20 grades, however, remained steady in tandem with its demand.

Indian buyers were reported in the market purchasing Thai RSS3 whilst Chinese buyers were active but still asking for lower prices in expectation of improved supply.

Both the futures and equity markets recorded gains for the week reflecting positive sentiment towards indicators in the global economy. Crude oil recorded a gain of US $ 2.44 per barrel to close the week at US $ 78.98 per barrel. Regional currencies too gained against the greenback whilst the Japanese yen retreated.

(irco.biz)

Rubber at Two-Week High as Asian Equities Rally Boosts Appeal

By Supunnabul Suwannakij

July 28 (Bloomberg) -- Rubber advanced for the second time this week, reaching a two-week high, as gains in Asian equity markets and a weaker Japanese currency boosted its appeal.

Futures climbed as much as 1.9 percent as Asian stocks rose, driving the MSCI Asia Pacific Index higher for the fourth straight day, on optimism over improving corporate earnings.

“Rallies across the Asian market spilled over to commodities, including rubber,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.

December-delivery rubber climbed as high as 268.6 yen per kilogram ($3,058 a metric ton) on the Tokyo Commodity Exchange at 12:16 p.m.

November-delivery rubber on the Shanghai Futures Exchange added 2.6 percent to 22,745 yuan ($3,355) a ton.

“A weaker yen supports the rubber market,” Kazunori Kokubo, general manager of the international business department at commodity broker Yutaka Shoji Co., said by phone from Tokyo.

The currency weakened to 87.90 yesterday from 86.88 on July 26, making the yen-denominated rubber contract more attractive for holders of other currencies.

Low stockpile levels in China and Japan led to speculation that buyers will step into the market to replenish inventories, Kokubo said.

“Warehouse stock in Japan is still very low and investors who hold short positions are worried about higher prices, prompting them to cover,” Kokubo said, referring to bets that prices would fall.

Data from the Tokyo exchange showed last week that natural- rubber stockpiles monitored by the bourse dropped by 29 percent to 1,341 tons as of July 10. It was the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.

Natural rubber stockpiles in China decreased 2,046 tons to 19,328 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said July 23.

(bloomberg.com)

Singapore Exchange Plans New Products as Derivative Trade Booms

By Jonathan Burgos

July 28 (Bloomberg) -- Singapore Exchange Ltd. plans to introduce new derivatives products to benefit from record levels of trading in the securities.

Contracts the bourse plans to introduce in the financial year ending June 2011 include futures and options that track European and Indian stock indexes, Janice Kan, senior vice president for derivatives at the Singapore Exchange, said in a July 26 interview.

The average daily volume of trading in futures and options totaled 240,292 contracts in June and 310,809 in May, exchange data showed. The record daily average across a whole year was 250,651 in 2008. Average daily trading in Hong Kong, whose stock market is four times the size of Singapore’s, was 456,742 contracts in June, according to the Hong Kong bourse’s website.

“The futures market thrives on volatility and uncertainty,” Kan said. “When there is volatility, people seek to hedge their investments. Futures are very efficient contracts to use for this.”

Historical volatility on Singapore’s benchmark Straits Times Index rose to a 10-month high in June as Europe’s mounting budget deficits sparked concern the sovereign debt crisis will spread. The gauge gained 3 percent last month following a 7.5 percent slump in May.

More than 10 stock and fixed-income futures and options instruments trade actively on Singapore’s exchange, bourse data show. Its Singapore Commodity Exchange Ltd. unit offers trading in futures for rubber, gold and coffee. Over-the-counter trading of iron ore, energy and freight-forward swaps are available on the clearinghouse SGX AsiaClear.

Euro Stoxx 50

Singapore Exchange announced this week a deal with Eurex, Europe’s largest derivatives exchange, to sell futures and options contracts linked to the Euro Stoxx 50 Index in the next six months. The contracts will be denominated in U.S. dollars.

The average daily volume of euro-denominated Euro Stoxx 50 Index futures traded on Eurex was more than 1.6 million contracts in the first half, while the options had 1.2 million contracts, Singapore’s bourse and Eurex said in a joint statement on July 26. The contract will be the Singaporean exchange’s first non-Asian index futures product.

“There is a lot of potential for this contract,” Kan said.

Her company will explore the feasibility of offering U.S. stocks futures and options after the European stock-index product is introduced, Kan said.

Within Asia, the bourse plans to offer options linked to India’s S&P CNX Nifty Index, she said. Nifty futures contracts are the third most-actively traded on the Singaporean exchange this year, bourse data showed.

Growth Engine

Kan said the exchange is also planning to revive trading on Chinese stock futures, which have not been active on the exchange since 2008. The bourse introduced a contract in 2006 based on the FTSE/Xinhua China A-50 Index.

Restrictions in China create demand for offshore trading in Chinese stock futures, even after the country introduced a futures contract in April, Kan said.

“Asia is the next growth engine for the world economy,” Kan said. “These products allow us to benefit from the trading flows into the region.”

The new products are expected to help SGX attract more overseas investors such as so-called high-frequency traders, Kan said.

High-frequency traders, who rely on computers to execute large orders at speeds usually at less than a thousandth of a second, now account for 25 percent of Singapore’s derivatives trading, up from about 10 percent two years ago, she said.

(bloomberg.com)

Sri Lanka rubber estate hopes for eco-friendly premium

July 28, 2010 (LBO) - A Sri Lankan rubber estate said it was expecting premium prices for a specialist rubber it was making after being certified for environmental growing and production standards.

Horana Plantations, a unit of Sri Lanka's Ceylon Theatres group, said its rubber and timber plantations had been certified for good forest management practices by the Forest Stewardship Council, an European organization helping guide 'fair trade' buyers.

The firm's rubber estates have been awarded Non-Timber Forest Products (NTFP) Certification by the FSC, the first for a Sri Lankan firm, it said.

"This certification has enabled the Company to obtain premium prices for the export of crepe and sole crepe rubber under the Fair Deal Trading agreement." Chief executive officer Rajiv Casie Chitty told shareholders in the annual report.

"This recognition has further encouraged HP-PLC (Horana Planations PLC) to continue our efforts to make plantation sustainable and eco-friendly."

Sri Lanka's is a niche producer of 'crepe' rubber which commands high prices in world markets.

The firm's timber and forestry cultivation has also been certified by the FSC.

The certification is given for "for managing and harvesting non-timber products from the raw material and rubber latex produced in our properties to minimise biodiversity loss and preserve sustainable rural life through responsible business practices," the firm said.

Horana Plantations had said it was increasing timber planting as prices for fuelwood rose.

Last year it had planted 29.5 hectares of timber trees and 55 hectares of rubber. Horana Plantations said rain reduced latex production last year to 1.4 million kilograms which was the lowest recorded "in many years."

"Despite the reduction in production, the Company recorded significant profits due to the strong market for Rubber in the world market and stringent management controls," Casie Chitty said.

The rubber prices at auctions in Colombo auction had increased from an average of 160 rupees to around 300 rupee levels by December 2009. The net sale average was 279.15 rupees per kilogram for 2009 up from 209.74 a year earlier.

Cost of production had increased to 208.16 per kilogram from 170.16 per kilo a year earlier, with labour and energy pushing up the total.

Gross profits from rubber had increased 71 percent to 102.3 million rupees from 59.6 million a year earlier.

"This sector is expected to perform consistently well in the future with the recovery from the global financial slump likely to renew and increase demand for rubber in the world market," Casie Chitty said.

The firm which also makes tea and small amounts of cinnamon posted net profits of 94 million rupees for the year ended March 2010 up from 55.2 million rupees a year earlier.

Gross revenues rose to 1.78 billion rupees from 1.38 billion rupees. The firm only paid 13.4 million rupees in management fees.

(lankabusinessonline.com)

Spot rubber shows mixed tren

On Tuesday (27 July 2010), the spot rubber showed a mixed trend and firm futures kept the sheet rubber bullish. The grade increased to Rs 183.50 from Rs 182.50 per kg mainly on covering purchases. Latex 60% continued its decline due to low demand.

The August futures for RSS 4 rose to Rs 184.50 (180.22), September to Rs 171.65 (167.52), October to Rs 161.90 (160.26) and November to Rs 160.50 (159.99) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 183.50 (182.50); RSS-5: 178 (177); ungraded: 168 (168); ISNR 20: 156.50 (158) and latex 60 per cent: 112 (117).

(indiainfoline.com)

Rubber Declines on Strengthening Yen, Increasing Thai Supplies

July 27 (Bloomberg) -- Rubber dropped, retreating from the highest price in two weeks, on a strengthening Japanese currency and the prospect of increased output from Thailand, the largest exporter of the commodity used to make tires and gloves.

Futures fell as much as 1.4 percent, the first decline in three days. The yen rose on speculation that exporters will buy the currency before Japan’s Obon, when Japanese take time off during the second week of August.

“The yen retains a strengthening tone and that has soured market sentiment, dragging rubber lower,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said from Bangkok.

December-delivery rubber fell to 262.2 yen per kilogram ($3,016 a metric ton) on the Tokyo Commodity Exchange, before settling at 263.5 yen. The contract touched 267.9 yen yesterday, the highest level since July 12.

“Exporters may purchase the yen ahead of the summer holidays,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. The currency rose to 86.83 per dollar from 86.88 yesterday, making the yen-denominated rubber contract less attractive for holders of other currencies.

“Rainfall in southern Thailand paved way for farmers to start tapping, increasing supply,” said Navarat Kaewpratarn, a senior marketing official at Future Agri Trade Co. “This also put pressure on the market.”

Japan won’t extend a subsidy program for buyers of fuel- efficient models, Nikkei Telecom 21 reported on July 23, citing Masayuki Naoshima, minister for economy, trade and industry. The program is scheduled to be terminated at the end of September.

“Some investors remain concerned car sales in Japan may decline once the government ends a subsidy program for eco- friendly cars,” said Agro Wealth’s Varut.

November-delivery rubber on the Shanghai Futures Exchange declined 0.6 percent to settle at 22,175 yuan ($3,272) a ton.

(Bloomberg.com)

Spot rubber shows mixed trend

On Monday (26 July 2010), the spot rubber showed a mixed trend. Sheet rubber increased to Rs 182.50 from Rs 182 per kg catalysed by the overall sentiments in the domestic and international futures.

The August futures for RSS 4 rose to Rs 180.35 (179.05), September to Rs 167.60 (165.80), October to Rs 160.40 (159.907) and November to Rs 160 (159.40) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 182.50 (182); RSS-5: 177 (177); ungraded: 168 (167); ISNR 20: 158 (160) and latex 60 per cent: 117 (123).

(indiainfoline.com)

Rubber Reaches Two-Week High as Stock Rally Boosts Confidence in Recovery

Rubber climbed to a two-week high as a rally in Asian stocks raised investor confidence in the economic recovery, increasing purchases of riskier assets.

Futures gained as much as 0.9 percent and advanced for a second day. Asian stocks climbed to a one-month high as investor optimism increased after South Korea economy grew in the second- quarter and Japan’s exports exceeded economists’ estimates.

Japanese shipments abroad advanced 27.7 percent in June from a year earlier, the Finance Ministry said today. It was faster than the median estimate of 19 economists surveyed by Bloomberg News for 23.5 percent. South Korea’s gross domestic product increased 1.5 percent from the previous three months, the central bank said, more than the 1.3 percent median forecast in a separate survey.

“A rally in equities markets improved investor sentiment, leading to purchases of industrial commodities,” Kazuhiko Saito, analyst at Tokyo-based broker Fujitomi Co., said today by phone.

December-delivery rubber rose to as high as 267.9 yen per kilogram ($3,065 a metric ton) on the Tokyo Commodity Exchange, the highest level since July 12, before settling at 265.9 yen.

July-delivery rubber gained 0.7 percent to expire at 400 yen. It surged 11 percent on July 23 amid speculation that low stockpiles in Japan may make physical delivery difficult at its expiry.

Data from the Tokyo exchange showed last week that natural- rubber stockpiles monitored by the bourse dropped by 29 percent to 1,341 tons as of July 10. It was the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.

Subsidy Ends

Gains in rubber futures were limited amid concern that car sales may decline after the government ends a subsidy program for fuel-efficient models, Saito at Fujitomi said.

Japan won’t extend a subsidy program for buyers of eco- friendly cars, Nikkei Telecom 21 reported on July 23, citing Masayuki Naoshima, minister for economy, trade and industry. The program is scheduled to terminate at the end of September.

Toyota Motor Corp. and Honda Motor Co., Japan’s two biggest carmakers, led an eleventh-straight increase in domestic monthly auto sales in June as government incentives boosted demand.

Sales of cars, trucks and buses, excluding minicars, climbed 21 percent to 293,537 vehicles in June from a year earlier, the Japan Automobile Dealers Association said July 1.

November-delivery rubber on the Shanghai Futures Exchange closed 1 percent lower at 22,280 yuan ($3,286) a ton at 3:00 p.m. local time.

(bloomberg.com)

Sri Lanka rubber prices rise on short supply

July 26, 200 (LBO) - Sri Lankan rubber prices rose again at last week's auction on continued short supply as rain affected tapping but brokers said the shortage might ease if the current dry weather continues.

The price of the main grade latex crepe 1X went up to 521.50 rupees a kilo.

"Prices went up due to short supply in the market," said Shehan Meegama of brokers John Keells.

"There has been bad weather- heavy rains - in the past so many weeks with no dry spell. Also, demand is increasing."

Other rubber traders said supply has been affected by disruption of production at key origins like Vietnam, Thailand and India earlier this year.

Rubber prices shot up because of the short supply and then eased when production at major origins returned to normal.

Demand is also up with the end of recession and growth in countries like China and India.

Automobile production, where rubber is needed to make tires, is also recovering.

"Car sales are zooming - there's a lot of demand - that’s why prices have gone up," said a rubber dealer.

The shortage in the local market forced come manufacturers who are exempt from import duty to import rubber.

But not all manufacturers can import because of very high import duty on rubber imports.

Meegama said the supply shortage might ease and prices might drop if the present dry weather continues.

"If the dry weather continues, in the next two weeks we might see increased volumes in the market."

Brokers and dealers said that although the industry has been trying to encourage the use of rain guards to enable tapping even during rains their use was still not widespread enough.

"Also, we've been having very heavy rains. When the rain is heavy it is difficult to tap. Tappers are also reluctant to go to the field during heavy rains."

(lankabusinessonline.com)

Rubber Fluctuates as Yen Drops, Japan’s Car Sales May Decline

By Aya Takada

July 26 (Bloomberg) -- Rubber fluctuated as a weaker Japanese currency raised the appeal of yen-based contracts amid concern that Japan’s car sales may decline after the government ends a subsidy program for fuel-efficient models.

Futures in Tokyo dropped as much as 0.4 percent after advancing to a two-week high. The yen declined amid optimism that the Asian economic recovery remains intact, damping demand for Japan’s currency as a refuge.

Investor appetite for rubber futures was curbed by speculation that demand for the commodity used to make tires may decline as the Japanese government will end subsidy payments to buyers of fuel-efficient cars in September, said Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co.

“Concern about demand is the largest drag on the price of rubber futures,” Saito said by phone today.

December-delivery rubber lost 0.6 yen to 265 yen per kilogram ($3,024 a metric ton) on the Tokyo Commodity Exchange at 11:15 a.m. local time. Earlier, it rose to 267.9 yen, the highest level since July 12.

Japan won’t extend a subsidy program for buyers of eco- friendly cars, Nikkei Telecom 21 reported on July 23, citing Masayuki Naoshima, minister for economy, trade and industry. The program is scheduled to end at the end of September, he said.

Toyota Motor Corp. and Honda Motor Co., Japan’s two biggest carmakers, led an eleventh-straight increase in domestic monthly auto sales in June as government incentives boosted demand.

Sales of cars, trucks and buses, excluding minicars, climbed 21 percent to 293,537 vehicles in June from a year earlier, the Japan Automobile Dealers Association said July 1.

Losses Limited

Losses in rubber futures were limited as the nearby contract extended gains after an 11 percent surge on July 23 amid speculation that low stockpiles in Japan may make physical delivery difficult at its expiry today.

July-delivery rubber gained 0.7 percent to 400 yen as of 9:11 a.m. local time. It surged after data showed last week that natural-rubber stockpiles monitored by the Tokyo exchange dropped by 29 percent to 1,341 tons as of July 10. It was the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.

November-delivery rubber on the Shanghai Futures Exchange was little changed at 22,200 yuan ($3,275) a ton at 10:36 a.m. local time.

(bloomberg.com)

Mardec plans South-East Asia expansion

It allocates RM150m for local and overseas investments

KUALA LUMPUR: Rubber processor Mardec Bhd plans to expand its overseas investments via new rubber processing plants and acquisition of rubber plantations in South-East Asia, said chief executive officer Khalid Bahsoon.

He said the group targeted to open two processing plants in the next two years. “Later, perhaps through our link with Tradewinds Plantations Bhd, Mardec might even own rubber plantations abroad.”

Currently, almost half of Mardec’s operations are overseas. It has four rubber processing plants in India, three plants in Indonesia and one in Vietnam with a combined total production of about 100,000 tonnes annually.

Mardec is the country’s third largest rubber processor after Lee Rubber and Felda Group.

Khalid was brought into Mardec early this year after Tradewinds Plantations proposed a takeover of Mardec for RM150mil in October last year. He was previously chief executive officer of Renewable Energy Sdn Bhd, a unit of MMC Group.

‘One of our strategies is to have rubber procesing facilities where the raw materials are easily sourced in major rubber growing countries like Indonesia and Thailand,’ says Khalid Bahsoon

The takeover, which is pending approvals from the Finance Ministry and the Economic Planning Unit, is slated for completion by the year-end.

Khalid told StarBiz that Mardec had allocated a capital expenditure of about RM150mil for its investments in Malaysia and overseas in the next five years.

He pointed out that the dwindling local natural rubber (NR) supply was making it more difficult for Mardec to secure consistent supply of raw materials for its Standard Malaysian Rubber (SMR) and rubber concentrate plants in Malaysia.

With the country’s NR production projected to drop to about 800,000 tonnes this year compared with one million tonnes last year, he said Mardec, apart from depending on local smallholders, had to source elsewhere for consistent supply of NR.

“One of our strategies is to have rubber processing facilities where the raw materials are easily sourced in major rubber growing countries like Indonesia and Thailand.

“Most of our SMR grade products in the overseas facilities are for export,” he added.

On the local front, Khalid said Mardec would also undertake some restructuring activities to position the group as the number one rubber processor in Malaysia in five years.

“There will be some consolidation of our existing plants and a new plant is also coming up as a result of the restructuring,” he added.

Mardec presently has five SMR plants and two rubber concentrate plants in Malaysia.

For this year, Khalid said: “We are targeting to produce a total of 150,000 tonnes from our local plants and 100,000 tonnes from the overseas plants.”

On the group’s 2010 performance, Khalid said he expected Mardec to perform better or at least maintain last year’s achievement.

He said Mardec was able to return to the black after registering a net profit of RM5mil on revenue of RM1bil for the financial year ended Sept 30, 2009 (FY09). The group posted a net loss of RM20mil on revenue of RM1.51bil in FY08.

Khalid also expected rubber prices to remain stable this year following rising demand particularly for tyre-grade SMR 20.

Last Friday, the Malaysian Rubber Board’s unofficial closing price for SMR 20 was up six sen at RM9.18 per kg while latex-in-bulk gained four sen to RM6.96 per kg.

(biz.thestar.com.my)

Rise in spot rubber prices

On Saturday (24 July 2010), the spot rubber prices rose, catalyzed by the bullish closing on the National Multi Commodity Exchange. Sheet rubber increased to Rs 182 from Rs 181 per kg on covering purchases. The trend was mixed as ISNR 20 ended flat and ungraded rubber declined on low demand.

The August futures for RSS 4 rose to Rs 179.05 (176.67), September to Rs 165.80 (162.91), October to Rs 159.90 (158.27) and November to Rs 159.40 (158.01) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 182 (181); RSS-5: 177 (176.50); ungraded: 167 (170); ISNR 20: 160 (160) and latex 60 per cent: 123 (123).

(indiainfoline.com)

India to continue current duty on rubber import

MUMBAI (Commodity Online): India rejected the industry’s demand for a cut on natural rubber imports from 20% to 7.5%, said a statement of Rubber Board of India. 

A panel, set up on the directives of the Delhi High Court, headed by the Rubber Board Chairman Sajen Peter, has decided to continue present import duty for natural rubber. 

However, the panel, called for a mechanism to cap the customs duty burden on the consuming industries by levying the duty at a benchmark level, irrespective of global prices. 

According to director general of the Automotive Tyre Manufacturers Association, Rajiv Budhraja, Demand for natural 41 rubber in India, the world's second-largest consumer, is growing by around 12% a year, but production is only expanding at 5%-6%. 

During the January-June period, the country imported 836,093 tons of natural rubber, up 1% from a year earlier. China is the world's biggest importer of natural rubber. It purchases most of its supplies from Thailand, Indonesia a Malaysia, the world's leading natural rubber producers. 

General Administration of Customs, China's natural rubber imports in June declined 12% from a year earlier to 115,752 metric tons. Imports were up 25% from 92,702 tons in May. 

According to government and industry sources, India's imports of natural rubber will likely rise in the current fiscal year as local production is growing at a much slower pace than demand, mainly from tire makers. 

(commodityonline.com)

Synthetic rubber imports rise by 51.6% in April

Imports of synthetic rubber rose by 51.6 per cent to 25,885 tonnes in April on strong demand mainly by the tyre industry, the Rubber Board said today.

Synthetic rubber imports stood at 17,065 tonnes in the corresponding period last fiscal, the board said.

The production of synthetic rubber in the country increased marginally to 8,180 tonnes in April this year against 8,169 tonnes in April, 2009.

During the month under consideration, the total consumption of synthetic rubber grew up by 24.7 per cent to 78,250 tonnes compared to 73,470 tonnes in the comparable month period last fiscal.

The consumption of synthetic rubber by the automotive tyre sector, which accounts for more than half of the rubber use in the country, increased by 31.6 per cent to 22,872 tonnes in April, 2010 against 17,373 tonnes in the corresponding period last year.

(indiainfoline.com)

Rise in spot rubber prices

On Thursday (22 July 2010), the spot rubber prices rose due to supply concerns but the prices failed to reach the expected levels as futures failed to hold on to early gains on the National Multi commodity Exchange. Sheet rubber increased to Rs 181 from Rs 180 per kg, while the trend was mixed as ungraded and latex ended flat.

The August futures for RSS 4 declined to Rs 177.70 (179.49), September to Rs 163.80 (166.38), October to Rs 159.01 (160.75) and November to Rs 159 (161.06) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 181 (180); RSS-5: 176.55 (175); ungraded: 170 (171); ISNR 20: 160 (159) and latex 60 per cent: 125 (125).

(indiainfoline.com)

Rubber Gains From 6-Week Low as Stock Rally Boosts Confidence

By Aya Takada

July 23 (Bloomberg) -- Rubber recovered from a six-week low as Asian stocks extended a global rally, boosting investor confidence in economic growth and raising speculation that demand will increase for the commodity used to make tires.

Futures in Tokyo climbed as much as 3 percent after slumping yesterday to the lowest level since June 9. The price also increased as a drop in the Japanese currency against the dollar raised the appeal of yen-based contracts.

Asian stocks increased, driving the MSCI Asia Pacific Index to its third straight weekly advance, as U.S. companies from AT&T Inc. to United Parcel Service Inc. raised profit forecasts. The yen fell against all of its major counterparts on speculation Japanese policy makers may act to weaken the currency to support economic growth.

“Rubber chased a rally in stocks and other industrial commodities,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Futures are also drawing support from the currency market.”

December-delivery rubber increased as much as 7.7 yen to 265 yen per kilogram ($3,047 a metric ton) before trading at 262.6 yen on the Tokyo Commodity Exchange at 10:55 a.m.

The MSCI Asia Pacific Index gained 1.3 percent to 117.10 as of 10:41 a.m., extending its increase this week. Japan’s currency, which yesterday traded within 0.1 yen of its 2010 high reached last week, retreated on the prospect that Prime Minister Naoto Kan’s administration will add pressure on the Bank of Japan to increase monetary easing measures.

Low Stockpiles

Rubber futures also increased amid speculation that low stockpiles in Japan may make physical delivery difficult when the nearby contract expires on July 26, Sugata said.

Natural-rubber stockpiles monitored by the Tokyo exchange dropped by 29 percent to 1,341 tons as of July 10, data from the bourse showed this week. It was the lowest volume since at least 2001, according to exchange spokesman Seiki Ichimura.

Speculators with short, or sell, positions in the nearby contract must buy them back by the expiry date, unless they can deliver the raw material. July-delivery rubber surged 4.3 percent to 372.5 yen. Last month, the June-delivery contract expired at 372 yen.

November-delivery rubber on the Shanghai Futures Exchange gained 2.1 percent to 22,065 yuan ($3,256) a ton at 10:04 a.m. local time.

Cash rubber prices in Thailand declined yesterday as Chinese buyers have put off orders and some investors are concerned that there’s a weaker pace of recovery in China and the U.S., according to the Rubber Research Institute of Thailand. The Thai benchmark price fell 1 percent to 103.65 baht a kilogram, the group said yesterday on its website.

(bloomberg.com)

Higher NR prices raise synthetic rubber demand

The rise in natural rubber (NR) price has reflected in a sharp increase in consumption of synthetic rubber (SR) in India, where NR is predominantly used for industrial applications.

The low price of SR, compared to NR, for the last couple of years has forced tyre majors to make a switch to SR. According to the latest trend in the consumption pattern, the current ratio of NR-SR consumption of 73:27 is likely to change to 70:30 in favour of SR by the end of the current financial year.

The Rubber Board data reveals that SR consumption increased to 347,710 tonnes during 2009-10 registering a growth of 18.7 per cent against a negative growth of 1.4 per cent attained in the previous year. The automotive tyre sector consumed 238,153 tonnes of SR during 2009-10 as against 185,094 tonnes during 2008-09, recording a growth of 28.7per cent.

The growth in the consumption of NR in 2009-10 was confined to 13.4 per cent. While a decline of 2.5 per cent was recorded in the consumption of NR by general rubber goods manufacturers (354,355 tonnes) last financial year, an increase of 1.6 per cent (109,557 tonnes) was registered in the consumption of SR.

The relative share of consumption of NR and SR in India changed to 73:27 during 2009-10 from 75:25 during 2008-09. The static or lower global production of NR has not only pushed the prices up, but it has also put the rubber-based industries on a tight spot.

The prices of various SR grades have, however, reduced due to the decline in the price of crude oil. During the last one year, the price of NR has increased more than 100 per cent as the local price of the bench mark grade RSS-4 touched a peak of Rs 185 a kg this month.

Natural rubber prices surged to a record high of more than $3,500 a tonne in the global market while SR rubber values are currently hovering around $2,500 a tonne on an average in the Asian markets.

The price hike has been a concern for leading NR growing nations, like Thailand, as they feel that big producers, like tyre companies, might switch over to synthetic rubber as they are cheaper. At present, European and US companies prefer SR to NR and their consumption ratio of SR:NR is 60:40. But the recent big shift towards SR in the Asean region has also added pressure on the price line on SR.

Natural rubber and synthetic rubber prices usually move in tandem as they are traditionally inter-dependent substitutes. Global synthetic rubber prices may surge on strong orders from tyre manufacturers looking for a cheaper alternative in raw material to natural rubber, industry sources said.

The rise in natural rubber prices added pressure to the tight synthetic rubber market, which was beset by spikes in cost of feedstock butadiene (BD).

BD prices had climbed by more than $200 a tonne over the past month to $2,000-2,050 a tonne.

“Natural rubber prices are going up so sharply that synthetic rubber makers have no choice but to raise their prices further,” a Chinese Styrene Butadiene Rubber (SBR) maker said. The price increase would likely lift costs for manufacturers that were heavily dependent on the commodity, particularly tyre makers. The use of synthetic rubber as an alternative may not offer much comfort since prices have also started to run up, market sources said.

Major synthetic rubber makers in Asia, including Kumho Petrochemical (KKPC), LG Chem, Zeon, BSTE of Thailand and PT Sentra of Indonesia, have all raised prices for fresh shipments for both the non-oil grade SBR and butadiene rubber (BR).

Fresh offers for SBR grade were $250- 350 a tonne higher from early March at $2,400-2,500 a tonne, while butadiene rubber (BR) surged to $2,800-2,850 a tonne, market sources said.

(business-standard.com)

Rubber Futures Decline to One-Week Low as Crude Oil Drops, Yen Strengthens

Rubber declined for a second day as lower oil prices and a strengthening Japanese currency hurt demand for the commodity amid concern that the global economic recovery may falter. Thai supplies also gained.

The most-active contract in Tokyo fell as much as 1.4 percent to the lowest in a week, heading for a second weekly drop. The yen rose against the dollar after Federal Reserve Chairman Ben S. Bernanke said yesterday that the U.S. economic outlook remains “unusually uncertain,” boosting demand for Japan’s currency as a refuge.

A “declining crude oil price and stronger yen damped market sentiment,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok. Gains in the Japanese currency cut the appetite for yen-based contracts.

The yen climbed against all of its 16 major counterparts as Bernanke that said policy makers are prepared to act as needed to aid economic growth, adding to traders’ bets that the U.S. central bank will keep interest rates near zero.

December-delivery rubber fell as much as 3.8 yen to 259.7 yen per kilogram ($2,999 a metric ton), the lowest level since July 14, before trading at 260.4 yen on the Tokyo Commodity Exchange at 11:16 a.m. local time. July-delivery rubber gained 0.9 percent to 355.3 yen, after rising 2.2 percent yesterday.

November-delivery rubber on the Shanghai Futures Exchange was little changed at 21,770 yuan ($3,211) a ton.

Oil for September delivery fell to as much 0.3 percent to $76.30 a barrel after an Energy Department report showed U.S. crude inventories climbed 360,000 barrels to 353.5 million last week. Lower oil prices make natural rubber less attractive against rival synthetic products made from petroleum.

Natural-rubber “supplies from southern Thailand have improved as rainfall declined, and this also put pressure on rubber prices,” Varut said.

The Thai cash price was quoted at 104.65 baht a kilogram yesterday, unchanged from July 20, the Rubber Research Institute of Thailand said on its website. Prices are updated in the afternoons.

(bloomberg.com)

Spot rubber ends unchanged

On Wednesday (21 July 2010), the spot rubber prices ended unchanged as there were no quantity buyers or sellers in the market. Sheet rubber ended unchanged at Rs 180 per kg, but the grade seemed to be struggling to remain subdued possibly on supply concern.

The August futures for RSS 4 rose to Rs 179.40 (174.27), September to Rs 166.03 (162.34), October to Rs 160.71 (158.17) and November to Rs 160.25 (158.00) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 180 (180); RSS-5: 175 (175); ungraded: 170 (170); ISNR 20: 159 (159) and latex 60 per cent: 125 (125).

(indiainfoline.com)

Villagers lay curse on rubber plantation in Mondulkiri province

ETHNIC Phnong villagers held a traditional ceremony in Mondulkiri province’s Pechreada district yesterday to curse a rubber plantation they say has robbed them of large tracts of rotational farmland and spirit forests. 

Khan Channy, a community representative, said villagers made offerings of pigs and jars of rice wine in order to curse Socfin KCD, a French-Cambodian rubber company, and make it “vanish like a dead pig”. 

The company – a joint venture between French rubber giant Socfin and the Khaou Chuly Group – was granted its first 2,500-hectare rubber concession in late 2007 and began clearing in early 2008. 

More than 800 families in seven villages in Bou Sraa commune – which is made up predominantly of Phnong villages – claim to have been affected by the rubber plantation, now expected to cover 10,000 hectares.

Kob Neith, another community representative, said the company had offered residents of her village three choices in exchange for vacating their land: to sell their land to the company for US$80 per hectare; to exchange the land for replacement plots elsewhere; and to harvest rubber in designated areas and then sell it back to the company. 

She said that although a decision has not yet been made, around 100 tractors and bulldozers were clearing land at the plantation site. 

Kob Neith said there had been no response to repeated petitions and requests from affected villagers.

Yesterday’s ceremony followed a similar one held in June last year. 

“We want a shared 350-hectare area for the whole community to support our living. It was the last resort to organise the ceremony to curse the company to vanish after the community has failed in dealing with the company,” she said.

Kul Midy, provincial coordinator for local rights group Adhoc, said a provincial committee met in late June to prepare for the registration of community land in Mondulkiri, but that Bou Sraa commune had not been on the agenda. 

“The villagers have the right to hold a ritual to curse the company like this to express their feelings to the authorities so that the authorities may help solve their land dispute with the company,” he said. 

Mondulkiri provincial governor Chan Yoeun declined to comment yesterday.

(phnompenhpost.com)

Sri Lanka rubber goods producers to protest levy

July 21, 2010 (LBO) - Exporters of finished rubber goods from Sri Lanka wants the government to lift a levy on their exports amid high raw material prices that was affecting their competiveness, an industry official said.

The 'cess' of four rupees a kilogram that is charged on finished rubber goods is expected to be used to give subsidies to growers.

"At the moment profits of growers have increased because rubber prices have increased steeply," Ananda Caldera, a senior rubber industry executive and a past president of an association representing rubber manufacturers in the island said.

"The growers no longer need subsidies. But the taxes are making it difficult for us to compete in international markets. We are going to request the plantations industry ministry to lift this cess."

Caldera said makers of rubber tyres and other goods were finding that cost of production in Sri Lanka were higher than other countries due to the cess.

He said finished rubber goods producers could export 60 billion rupees a year.

He said the demand for tyres which had slumped amid a global economic downturn was now improving and raw rubber prices are likely to go up further.

Sri Lanka's central bank, which keeps a tight peg with the US dollar has appreciated the rupee again to around 113 rupees a US dollar in recent weeks. Meanwhile Sri Lanka is also expected to lose tax benefits for export to the EU region from August.

(lankabusinessonline.com)

Spot rubber ends unchanged

On Tuesday (20 July 2010), the spot rubber prices ended unchanged as the domestic rubber prices are likely to move side ways this week on limited supplies due to rain. Sheet rubber ended unchanged at Rs 180 per kg.

The August futures for RSS 4 declined to Rs 174.20 (174.34), September to Rs 162.30 (163.41), October to Rs 158 (159.60) and November to Rs 158 (159) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 180 (180); RSS-5: 175 (175); ungraded: 170 (171); ISNR 20: 159 (159) and latex 60 per cent: 125 (126).

(indiainfoline.com)

IRCo's WEEKLY MARKET SNAPSHOT: 12 - 16 July 2010

IRCo's DCP shed 4.57 US cents/kg. during the week under review breaking the US $ 3.00/kg. level for the first time after four weeks as supply improved in Thailand, the world's leading producer, and sellers pressured to reduce prices.

Overall sentiment was weak with mixed economic and financial indicators, especially from the western economies.

The equity markets went into negative territories whilst crude oil managed to hold steady above US $ 76 per barrel for most of the week. Regional currencies were steady against the greenback whilst the Japanese yen continued to strengthen.

(irco.biz)

Future of rubber company Mabor de Moçambique to be announced in two days

Future of rubber company Mabor de Moçambique to be announced in two days   [ 2010-07-21 ]

Maputo, Mozambique, 21 July – The future of rubber manufacturer Mabor de Moçambique - Manufactura de Borracha is to be announced in two days following a shareholders meeting, Macauhub has learned in Maputo.

The company is majority-owned by the Mozambican state and by individuals.

The meeting’s agenda includes analysis, dicussion and voting on the report and accounts for the 2006/08 period and analysis, definition and deliberation of proposals for the future of the company, amongst other matters.

Mabor de Moçambique is one of a number of state-owned companies at which production is currently halted.

Some old companies that are also at a standstill are Riopel, a textile sector company, and glass company Vidreira de Moçambique.

When it was still operating, Mabor de Moçambique once supplied several countries in Southern Africa such as Namibia, Botswana, Malawi, Zambia, South Africa and other parts of the world. 

(macauhub.com.mo)

Rubber Climbs as Yen Drops, Stockpiles May Boost July Prices

By Aya Takada

July 20 (Bloomberg) -- Rubber increased as a weaker Japanese currency raised the appeal of yen-based contracts and data showed stockpiles monitored by the Tokyo Commodity Exchange dropped to the lowest level in at least nine years.

Futures in Tokyo climbed for a second day and gained as much as 0.8 percent after declining last week by 3.3 percent. The yen retreated from a seven-month high against the dollar on speculation that the central bank may weaken the currency.

Natural-rubber stockpiles monitored by the Tokyo exchange dropped by 29 percent to 1,341 metric tons as of July 10, data from the bourse showed. It was the lowest volume since at least 2001, exchange spokesman Seiki Ichimura said. Data before that year were unavailable, he said.

“As domestic stockpiles are at a very low level, short- position holders may have to buy back the nearby contract,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said today. Speculators with short, or sell, positions in the nearby contract must buy them back by the July 26 expiry date, unless they can deliver the raw material.

December-delivery rubber gained as much as 2.1 yen to 266 yen per kilogram ($3,059 a metric ton) before settling at 264.5 yen on the Tokyo Commodity Exchange. July-delivery rubber, which lost 3 percent today, surged by as much as 2.8 percent on July 16 amid speculation that the low stockpiles may make physical delivery difficult at the expiry.

“The market was supported by speculation that the nearby contract may surge before its expiry,” Shigemoto said today by phone. The July contract settled at 344.4 yen.

Gains Limited

Gains in futures were limited after U.S. home-builder confidence dropped more than forecast, renewing concern the economic recovery may falter.

The National Association of Home Builders/Wells Fargo confidence index dropped to 14 this month, the lowest level since April 2009, from 16 in June, data from the Washington- based group showed yesterday. Builders in the U.S. turned more pessimistic in July than forecast, a sign the expiration of a government tax credit will depress home construction.

The yen fell against all of its 16 major counterparts amid speculation recent gains will spur Japanese authorities to weaken the currency.

The Bank of Japan may take steps to ease monetary policy should the yen stay at about 85 per dollar, Dow Jones Newswires reported yesterday, citing people familiar with deliberations at the central bank.

November-delivery rubber on the Shanghai Futures Exchange gained 1.7 percent to 21,720 yuan ($3,205) a ton at 2:45 p.m. local time.

(bloomberg.com)

Malaysia: No drastic rubber demand change

Malaysia can’t see any “drastic” change in rubber supply and demand at the moment, Plantation Industries and Commodities Minister Datuk Bernard Dompok told reporters in Kuala Lumpur today.

The Southeast Asia country is still expecting to produce 900,000 metric tons of the commodity this year, Dompok said.

It is also encouraging smallholders to replant, he said. Malaysia is aiming for 40,000 hectares of annual replanting, Dompok said.

(btimes.com.my)

Government To Review SMR Specification Scheme

KUALA LUMPUR, July 20 (Bernama) -- The government is looking to review the Standard Malaysian Rubber (SMR) Specification Scheme to ensure that the over 40-year rubber grade remains relevant to current demands and is competitive.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said over the last four decades, the SMR Specification Scheme had transformed the country's natural rubber industry into a modern and technology-based sector, which produces technically specified rubber (TSR).

He said SMR is an internationally recognised brand name and the SMR standard is adopted by many other natural rubber producing countries.

However, the scenario had changed over the years and the country is now the third largest natural rubber producer while becoming less competitive as a producer in view of higher production costs, he said at the seminar on Standard Malaysian Rubber-New Dimensions here Tuesday.

"It is appropriate time for us to review our marketing strategy and seek to explore other ways of extracting value out of the goodwill and branding attached to the SMR that we produce. One particular aspect, may be for us, to review the SMR Specification Scheme," he said.

The SMR Specification Scheme was first launched in 1965. Since then, the scheme has undergone several revisions to accommodate technological advancements, changes to supplying materials and to satisfy consumer requirements.

The last revision was made in 1991.

Dompok is also confident that SMR producers in the country are in better position to re-strategise by shifting from processing standard block rubbers to other value-added rubbers such as specialty and new modified rubbers that are ready to be used by manufacturers of rubber products.

He also urged the midstream sector to be more efficient and competitive.

"This sector should no longer be associated with the perception of a dirty and low income industry. The rubber processors should utilise advanced processing tecnologies to achieve high productivity and cost effectiveness," he said.

Meanwhile, the seminar was organised by the Malaysian Rubber Board (MRB) to address the current issues and status of the SMR Specification Scheme, including issues of raw rubber supply and environmental concerns faced by the industry.

At the seminar, Dompok also launched an innovative machine, the RRIM Rapid DRC, developed by the MRB for dry rubber content (DRC) determination of cup lumps.

The machine is capable of determining DRC rapidly and accurately.

(bernama.com)

Rubber gives nomads an address - Tripura shifting cultivators settle for a permanent farming mode

Agartala, July 19: Latex is luring 30 nomadic families, which were spotted in different locations in three successive censuses, into settling down — with organised rubber plantations edging out the “bohemian” jhum cultivation.

Rankubai, the fabled village peopled exclusively by Reang shifting cultivators, is now a visible dot on Tripura’s hillscape in Gandacherra subdivision bordering Chittagong Hill Tracts of Bangladesh.

A primary school, two Mark-II wells, a tenuous road linking the new hamlet to Raisyabari market and occasional visits of rubber board officials are the first marks of development.

“It was with sustained persuasion and cajoling that we managed to win over the headman of the nomadic Rankubai village, Chitradhar Reang, 60, to make a new beginning. When they agreed, we allotted 45 hectares of land to 30 owners for rubber plantation. The Rubber Board came forward, providing them with earning for work on their own land since 2005. We have also been allotting work to them under various centrally sponsored schemes and in another two years the villagers will earn substantially from their rubber gardens,” said Shailaram Reang, joint director of primitive group programme department.

He recounted how resettlement projects for shifting cultivators — mostly Reangs — had failed earlier because within two or three years, the indigenous shifting cultivators would get tired of their new way of life and desert the resettlement areas after selling tin, timber and other household goods provided by the government.

“The entire way of life, ethos and values of the shifting cultivators revolve around jhum or shifting cultivation and without congenial conditions they tend to leave the settled way of life. Fortunately, rubber cultivation in hilly areas replicates their lifestyle in many ways,” said Reang.

Altogether 5,000 of Tripura’s 27,500 hardcore shifting cultivators have been resettled in newly created villages through rubber cultivation and the rest is also expected to be won over to the new way of life.

Apart from the resettlement scheme sponsored by the government and assisted by the rubber board, rubber cultivation is rapidly transforming Tripura’s socio-economic profile.

(telegraphindia.com)

Spot rubber ends unchanged

On Monday (19 July 2010), the spot rubber prices continued to rule unchanged and the market was mostly inactive as the leading Tokyo Commodity Exchange remained closed on account of Ocean Day. Sheet rubber ended flat at Rs 180 per kg amidst scattered transactions.

The August futures for RSS 4 rose to Rs 174.70 (170.44), September to Rs 163.90 (160.38), October to Rs 160.20 (157.91) and November to Rs 159 (161) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 180 (180); RSS-5: 175 (175); ungraded: 170 (171); ISNR 20: 159 (159) and latex 60 per cent: 125 (126).

(indiainfoline.com)

Govt considering reducing import duty on natural rubber

The government today said it is considering cutting import duty on natural rubber, a long pending demand of tyre manufacturers.

"Yes, I have seen requests ... We are thinking about it," Commerce Secretary Rahul Khullar said when asked whether the government is considering the industry's proposal to reduce import duty on natural rubber.

At present, customs duty on natural rubber, the main raw-material for tyres, is 20 per cent, whereas the customs duty on tyres (the finished product) is 10 per cent.

The tyre industry has been demanding a reduction in import duty on natural rubber from the current 20 per cent to 7.5 per cent in view of high domestic prices, which have been ruling in the range of Rs 170-180 a kg. In the global market, prices of natural rubber (RSS-3 variety) are ruling at Rs 153.73 per kg.

According to the Rubber Board, consumption of the commodity has been increasing on account of rising production of tyres.

The production of truck and bus tyres increased by 15 per cent and 21 per cent respectively during 2009-10 over the year-ago period.

According to the Board, imports of natural rubber was estimated to fall to 70,000 tonnes in the current financial year from 1.7 lakh tonnes in the previous fiscal.

Last month, imports declined by more than half at 9,255 tonnes due to higher global prices.

In 2010-11, the consumption of the commodity was estimated at 9.78 lakh tonnes and production at 8.93 lakh tonnes.

India, after China, is the second largest consumer of natural rubber.

(business-standard.com)