Spot rubber zooms to new peak

Kottayam, Dec. 21

Spot rubber finished firm on Tuesday. The trendsetting Japanese markets continued to explore new highs as heavy rains in major producing countries triggered fund buying amidst tight market conditions.

But the gains in domestic spot were limited as buyers stayed back following the weakness on the National Multi Commodity Exchange (NMCE). Sheet rubber created yet another record at Rs 207.50 (Rs 207) a kg according to traders.

The grade increased to Rs 207.50 (Rs 206) a kg both at Kottayam and Kochi, according to the Rubber Board. Reacting to the current developments in the market, Mr N. Radhakrishnan, President, Cochin Rubber Merchants Association, said that it has become a part of the vicious circle.

Speculators in the international futures increased their prices, while our speculators also enhanced prices simultaneously.

Growers take it for granted that futures prices would become a reality soon. Since the current market prices are lower compared with futures, growers hold the stock which opens the way for further hike in prices.

The January series declined to Rs 210.05 (Rs 212.36), February to Rs 214.92 (Rs 216.76), March to Rs 219.96 (Rs 220.85) and April to Rs 224.20 (Rs 225.41) a kg for RSS-4 on the National Multi Commodity Exchange.

The December futures improved further to ¥ 405 (Rs 218.94) from ¥ 398.1 during the day session and then to ¥ 406.4 (Rs 219.65) a kg for RSS-3 in the night session on Tokyo Commodity Exchange (TOCOM).

Fundamentally, rubber is likely to extend gains, according to reports from Bangkok. Still there are worries over short supplies as rains may continue until early next year till the low-production period sets in. RSS-3 (spot) flared up to Rs 220.60 (Rs 217.45) a kg at Bangkok.

Spot rubber rates (Rs/kg) were: RSS-4: Rs 207.50 (Rs 207), RSS-5: Rs 201.50 (Rs 201), Ungraded: Rs 197.50 (Rs 197), ISNR-20: Rs 202.50 (Rs 201) and Latex 60 per cent: Rs 134 (Rs 134).

(Source: http://www.thehindubusinessline.com/2010/12/22/stories/2010122251141800.htm)