India rubber seen up on bargain-buying, supply woes

Jan 31 (Reuters) - Indian rubber prices are likely to edge higher this week after a five-percent decline in the past four sessions as bargain hunting driven by lower supplies and firmness in the world market are seen supporting, dealers said.

"The wide difference between local and international prices is prompting farmers to hold their produce. Supply in the spot markets is thin despite higher tapping," George Valy, president of The Indian Rubber   Dealers Federation (IRDF), told Reuters.

On Monday, spot price of the most traded RSS-4 rubber (ribbed smoked sheet) fell by 300 rupees to 22,300 rupees per 100 kg in the Kottayam market in the southern state of Kerala. The price has fallen 5 percent in the past four sessions.

Spot rubber price in Thailand, the world's biggest producer and exporter of natural rubber , rose by 104 rupees to 26,246 rupees per 100 kg.

The benchmark February contract NMRUG1 on India's National Multi-Commodity Exchange (NMCE), meanwhile, provisionally closed 2.3 percent lower at 21,799 rupees per 100 kg.

The country's natural rubber output in December edged up by 0.6 percent to 101,500 tonnes as favourable weather allowed farmers to increase tapping, the state-run Rubber Board said in a statement. [ID:nSGE70205T]

Tight supply of natural rubber  in the world market "is likely to be aggravated further" in February-May 2011, as it is seasonally the lean period for tapping, the Association of Natural Rubber Producing Countries (ANRPC) said. [ID:nSGE6BN074]

Key Tokyo rubber futures retreated from their early highs and ended lower on Monday as oil prices lost steam after rising on concerns that tensions in Egypt might spread across the Middle East, while a stronger yen also capped the market's gains. See [ID:nTOE70U061] (Reporting by Rajendra Jadhav; Editing by Rajesh Pandathil)

(Source: http://www.reuters.com/article/2011/01/31/india-rubber-prices-idINSGE70U0CW20110131)

Commodity Trading Tips for Rubber by Kedia Commodity

Rubber yesterday traded with the negative node and settled -1.24% down at 22349 as the market failed to regain strength on buyer resistance. Rubber prices likely to rose amid concerns that demand will continue outpacing production. Natural rubber demand may grow 4.6 percent this year, boosted by strong vehicle sales, with consumption continuing to outpace supply in coming years, according to the International Rubber Study Group.

Malaysia's natural rubber production surged 13% to 970,000 tonnes in the last year over 857000 tonnes produced in 2009, plantation and agricultural minister said. In yesterday's trading session Rubber  has touched the low of 22170 after opening at 22650, and finally settled at 22349. For today's session market is looking to take support at 22080, a break below could see a test of 21811 and where as resistance is now likely to be seen at 22708, a move above could see prices testing 23067. Trading Ideas: Rubber trading range is 21811-23067.

Rubber ended down as market failed to regain strength on buyer resistance. Rubber weekly stocks at Shanghai exchange came down by 6985 tonnes Spread between Rubber FEB & MAR contracts yesterday ended at 514.00. Spread yesterday traded in the range of 505 to 675. NMCE accredited warehouses Rubber stock rosed by 118kgs to 10931kgs.

(Source: http://www.topnews.in/commodity-trading-tips-rubber-kedia-commodity-2308928)

Rubber R&D to push demand

Experts are urging Thailand to accelerate research and development (R&D) of rubber products and promote local rubber consumption to reduce dependence on exports.

Both the government and the private sector see the proposal as one solution to help the country maintain its status as the world's biggest supplier of natural rubber and become an Asean rubber trading centre.

Thailand's rubber industry now relies too much on exports, as only 10% of production is consumed locally.

Luckchai Kittipol, president of the Thai Rubber Association (TRA), said the government should focus on R&D to develop local mid- and downstream production, adding value to natural rubber.

"Thailand should institute a policy of turning the country into a regional rubber centre in terms of trading or product development," he said.

Mr Luckchai's comments were in response to a recent announcement by the coastal Chinese city of Qingdao that it intended to achieve global "rubber city" status similar to Akron, Ohio.

He said China wanted a rubber city because it is the world's largest user of natural rubber at 3.4 million tonnes a year, much higher than the 900,000 tonnes consumed by the US and India and 700,000 tonnes by Japan.

Qingdao is the highest user of natural rubber in China, more than one million tonnes annually, as a large number of manufacturers in the city use it to produce items such as automobile tyres, shoes and rubber gloves.

China has only about two million rai in Yunnan and Hainan provinces that are suitable for growing rubber trees, so it has developed plantations in Laos and Burma.

Meanwhile, this year the TRA is targeting natural rubber exports of 2.8-2.9 million tonnes worth more than 300 billion baht, up from 2.7 million tonnes worth 250 billion baht last year.

The expected increase in value is due partly to the commodity's rising price, which looks set to become at least 50% higher than last year's average of 106 baht a kilogramme.

Apichart Jongskul, secretary-general of the Office of Agricultural Economics, said Thailand could not compete with China in developing mid- and downstream industries, but it can maintain its upstream leadership.

The Agriculture Ministry has proposed establishment of a Rubber Authority of Thailand to integrate the three rubber organisations - the Rubber Estate Organisation, the Office of the Rubber Replanting Aid Fund and the Rubber Research Institute of Thailand.

This single authority would foster greater efficiency in developing an integrated rubber industry, particularly in terms of R&D for product development, adding value and raising domestic consumption.

The government plans to use the current levy on rubber  sales for this purpose. Called the "cess rate", it now stands at a ceiling of five baht a kilogramme charged once the export price per kilo reaches 100 baht or more.

Mr Luckchai, who is also the chief executive of Thai Hua Rubber Co, plans to develop a rubber industry estate on 2,000 rai in Rayong province as a production site for manufacturers.

(Source: http://www.bangkokpost.com/business/economics/219211/rubber-r-d-to-push-demand)

China's synthetic rubber industry in 2010

BEIJING, Jan. 31, 2011 (Xinhua News Agency) -- China's fertilizer industry showed even remarkable recovery and posted stable development in 2010 thanks to a series of stimulus policies.

Based on statistics released on the website of the National Development and Reform Commission (NDRC), operation of China's synthetic rubber industry in 2010 can be summarized in the following aspects.

-- Output grew steadily, and product mix further optimized.

Output of China's synthetic rubber industry reached 3.1 million metric tons (tonnes) in 2010, up 11.7 percent year on year.

In April 2010, the 30,000 tonnes brominated isobutylene isoprene rubber (BIIR) production facility of Sinopec's (NYSE:SNP) Yanshan branch and the 15,000 tonnes isoprene rubber (IR) production installation of Luhua Chemical's Maoming branch put into production, which fill the blanks of China's BIIR and IR production.

-- Prices gradually increased, and economic efficiency improved remarkably.

Key products of the synthetic rubber industry kept at high level in 2010 due to crude oil price surge and better macro economic anticipation.

Except chlorobutadiene rubber, whose price fell 1.1 percent in 2010, prices of styrene butadiene rubber (SBR), cis-1, 4-butadiene rubber, nitrile rubber, ethylene-propylene rubber (EPR), and Butyl rubber increased 42 percent, 64.3 percent, 31.4 percent, 15.6 percent, and 14.9 percent, respectively.

Sales and output ratio reached about 100 percent, with production and sales basically balanced.

Industrial profit reached 3.549 billion yuan in the first 11 months of 2010, up 38.3 percent year on year.

-- Foreign trade increased rapidly, with rising trade deficit.

China's imports and exports of synthetic rubber totaled 4.9 billion US dollars in 2010, up 50.9 percent year on year, and trade deficit of the industry cane to 3.71 billion US dollars, up 32.8 percent year on year.

Imports of the industry registered at 4.3 billion US dollars, up 42.6 percent year on year, while exports stood at about 600 million US dollars, up 164.1 percent year on year.

(Source: http://www.istockanalyst.com/article/viewiStockNews/articleid/4847386)

Renault rolls own rubber

The new Motrio range is designed to deliver high performance – in wet or dry weather - & has been tested to Renault's strict specifications to make sure owners can be sure that the performance of the tyre is in harmony with their vehicle.

Renault is continuing its drive to help lower the cost of motoring by introducing its own high-quality, low-price tyre brand, becoming the first vehicle manufacturer to offer its customers an own-branded tyre.

two tread patterns feature in the range: Motrio Impulsion maximises driving comfort for the smaller models such as Twingo & Clio while Motrio Impulsion+ offers a more dynamic focus to suit the remainder of the range & the firm's sportier models. Both tread patterns though provide   silent running, even at high speeds, as well as greater steering accuracy, braking efficiency &, thanks to their longevity, reduced maintenance costs.

Renault UK director of service & quality Mark Crockett said: "After servicing, tyre replacement is the second most frequent reason for a driver to visit a dealership or workshop & it is also one of the highest value items when maintaining a vehicle. Our new own-brand tyre range, which of work carries Renault's seal of approval, is  competitively priced & in plenty of cases is significantly less pricey than the premium brands helping motorists to reduce their costs without sacrificing on quality."

Renault South Africa says local vehicle owners will regrettably not be able to take advantage of the product at this time as current legislation prevents automobile manufacturers from importing tyres.

The new tyre range will be rolled out at in the UK from 1 February & is specially developed to suit the requirements of older Renault vehicles. Prices start from R407 per tyre fully fitted.

(Source: http://motoring.iafrica.com/newsbriefs/702483.html)

Watawala profits boosted by improved tea and rubber prices

Watawala plantations, a unit of India's Tata group releasing its December quarter interim results said that it has recorded 189 million net profit, a 4 percent increase from a year ago.

The plantation company's nine months net profit has risen 84 percent to Rs.418 million, amidst improved tea, rubber and palm oil prices in the market.

Earnings per share for the company were 80 cents compared with 7.71 rupees the previous year, before a one into ten share split in September 2010.

Commenting on the tea sector performance of the company, Chairman Vish Govindasamay said, "The performance of tea was encouraging which bettered the performance of the previous period by improving on the bottom line by 44%. Increased production coupled with better agricultural practices and better prices in comparison with the market elevation averages were the main contributory factors.'

He also said that Waltrim Estate in the Lindula region which now has a "State of the Art" factory has re-established its mark in the region by fetching high prices.

"This recovery after the old Waltrim factory which was fully gutted by fire in April 2008 is remarkable" he remarked.

The rubber sector has contributed Rs. 80 million profit when compared to a loss of Rs. 7.5 Mn in the same period in the previous year. The average prices during the nine months improved by 80%.

"The company will be in a position to capitalize on this situation and report a better performance in the next quarter, subject to good weather conditions" Govindasamy said.

The company's Oil Palm segment has delivered Rs. 168 Million profit.  "This is marginally lower when compared to the previous period as production declined due to unfavourable weather conditions but with improving prices due to global supply shortages, profitability was maintained" he said.

The former FMCG division of the company has been converted to Watawala Marketing Ltd. in April 2010. The marketing of the company's brands like Zesta Tea, Watawala Kahata, Ran Tea, Zest Mineral Water and Oliate Vegetable Oil are done by the company..

Watawala Marketing has had a remarkable nine months ended December 2010, reporting a nett Profit of Rs. 157 million which is a 43% growth over the nett profit of the previous period. Exports of the company to Australia are now handled by Watawala Marketing Ltd.

Watawala continues to benefit from its partnership with Tata Global Beverages Ltd. (formerly Tata Tea Ltd.) with increasing support for exports of bulk and value added tea to them and their clients.

(Source: http://print.dailymirror.lk/business/127-local/34509.html)

Spot rubber declines further

Kottayam, Jan. 31

Physical rubber prices moved down further on Monday. The market lost ground following the sharp declines in domestic futures on the National Multi Commodity Exchange. According to sources, selling from dealers kept the commodity under pressure during the day. The markets in general seemed to be moving under the grip of speculators, they said. Certain tyre companies bought RSS 4 up to Rs 225 a kg on early trades, an observer said.

Sheet rubber  slid to Rs 221.50 (224.50) a kg, according to dealers. The grade moved down to Rs 223 (226) a kg, as quoted by the Rubber Board.

Futures weak

The February series for RSS 4 weakened to Rs. 217.99 (223.21), March to Rs 222.60 (228.38), April to Rs 231.36 (238.16) and May to Rs 239.25 (244.78) a kg on the NMCE.

RSS 3 (spot) improved to Rs 262.46 (261.42) a kg at Bangkok. The February futures for the grade slipped again to ¥478.7 (Rs 267.44) from ¥479.3 a kg during the day session but then remained unchanged in the night session on the Tokyo Commodity Exchange.

Spot rates were: RSS-4: 221.50 (224.50); RSS-5: 215 (216); Ungraded: 210 (213); ISNR 20: 219 (220) and latex 60 per cent: 149 (151).

(Source: http://www.thehindubusinessline.in/2011/02/01/stories/2011020151742200.htm)

China 2010 syntetic rubber output hit 3.1 million tons

BEIJING (Commodity Online) : China’s output of synthetic rubber hit 3.1 million tons last year, up 11.7% year on year.
In 2010, China's foreign trade of synthetic rubber totalled 4.9 billion, surging 50.9% year on year, and the trade deficit surged 32.8% year on year to $3.71 billion.
The import value of synthetic rubber  increased 42.6% year on year to $4.3 billion, while the export value skyrocketed 164.1% year on year to about $600 million.
The price of synthetic rubber remained at a high level, and the price of styrene-butadiene rubber, butadiene rubber, acrylonitrile-butadiene rubber, ethylene-propylene rubber and butyl rubber reflected an increase of 42%, 64.3%, 31.4%, 15.6% and 14.9% year on year, respectively. However, the chloroprene rubber's price slightly decreased 1.1% year on year.
A subsidiary of China Petroleum & Chemical Corp started operation on a 30,000-ton butyl rubber base and a 15,000-ton isoprene rubber base in April 20.

(Source: http://www.commodityonline.com/news/China-2010-syntetic-rubber-output-hit-31-million-tons-36076-3-1.html)

IRCo's WEEKLY MARKET SNAPSHOT: 24 - 28 January 2011

IRCo's DCP moved back to 550.76 US cents/kg on Friday while Tokyo and Shanghai rubber  futures and cash prices in the region also fell back from higher levels on an earlier Friday due to some profit taking and weakness in commodity markets in the middle of the week. However, strong market fundamentals and positive technical indicators still lent support for rubber prices to float above 500 US cents/kg. The rubber market in the coming week will be subdued as Chinese buyers will take the week-long Lunar New Year holiday break starting 2 February.

Asian stock markets ended mostly lower on Friday after Standard& Poor cut Japanese sovereign debt rating on Thursday, and concerns about the lingering violence in Egypt dampened market sentiment on stock markets in Europe and Wall Street but pulled up crude oil futures on Nymex.

On the forex market, the Japanese yen strengthened slightly against its rivals on Friday as investors bet that Standard & Poor's downgrade of Japan's sovereign debt rating wouldn’t drag heavily on the currency ahead, as the move appeared unlikely to substantially tarnish the unit's role as a safe-haven asset, according to a report by Dow Jones. In the meantime, Thai baht, Indonesian rupiah, and Malaysian ringgit also got support from the strengthening Japanese yen.

Furthermore, it is expected that the decisions by Beijing to raise the minimum down payment on second-home purchases to 60.0% from 50.0% on Wednesday and to introduce its first property tax on the new second home in the range of 0.4% to 1.2% of purchase prices on Friday can cool down its overheated economy at some levels.

(Source: http://www.irco.biz/MarketWise.php)

Tokyo Futures Rise On Oil Gains, Capped By Firm Yen

Key Tokyo rubber futures rose on Monday (January 31) on a rise in oil prices due to concerns that tensions in Egypt might spread across the Middle East, but a stronger yen helped to cap the gains.
The benchmark rubber  contract on the Tokyo Commodity Exchange for July delivery rose as much as 6.6 yen or 1.4 percent in early trade to 475.7 yen per kg, and was up 5.3 yen or 1.1 percent at 474.4 yen as of 0015 GMT.
The market fell 1.4 percent last week, posting its first weekly loss in a month. The benchmark contract hit a record peak of 484.9 yen last week.
On the Shanghai futures exchange, the most active rubber contract for May delivery rose as high as 40,945 yuan ($6,221) per tonne on Friday (January 28), just below a record peak of 41,200 yuan marked last week. The contract closed at 40,940 yuan per tonne on Friday (January 28), up from the previous close of 40,550 yuan. Volume stood at 610,376 lots.
Analysts said the market technically was looking bullish and supply concerns continued to underpin demand.
But the market also faced selling pressure as investors, wary of the recent rapid pace of price increases, may close positions in the near term, especially ahead of China's New Year holidays, when buying by the world's largest rubber consumer halts.
China begins the week-long Lunar New Year holiday on Feb. 2.
U.S. crude rose $1 to $90.34 a barrel on Monday (January 31) on concerns that unrest in Egypt could intensify and spread across the Middle East.
The U.S. dollar and the yen edged higher against the euro in early trade on Monday (January 31) as investors sought safer havens amid concerns over the simmering tensions in Egypt.
(Reuters, January 31, 2011)

A Cross of Rubber

Last Saturday, reported The Financial Times, some of the world’s most powerful financial executives were going to hold a private meeting with finance ministers in Davos, the site of the World Economic Forum. The principal demand of the executives, the newspaper suggested, would be that governments “stop banker-bashing.” Apparently bailing bankers out after they precipitated the worst slump since the Great Depression isn’t enough — politicians have to stop hurting their feelings, too.

But the bankers also had a more substantive demand: they want higher interest rates, despite the persistence of very high unemployment in the United States and Europe, because they say that low rates are feeding inflation. And what worries me is the possibility that policy makers might actually take their advice.

To understand the issues, you need to know that we’re in the midst of what the International Monetary Fund calls a “two speed” recovery, in which some countries are speeding ahead, but others — including the United States — have yet to get out of first gear.

The U.S. economy fell into recession at the end of 2007; the rest of the world followed a few months later. And advanced nations — the United States, Europe, Japan — have barely begun to recover. It’s true that these economies have been growing since the summer of 2009, but the growth has been too slow to produce large numbers of jobs. To raise interest rates under these conditions would be to undermine any chance of doing better; it would mean, in effect, accepting mass unemployment as a permanent fact of life.

What about inflation? High unemployment has kept a lid on the measures of inflation that usually guide policy. The Federal Reserve’s preferred measure, which excludes volatile energy and food prices, is now running below half a percent at an annual rate, far below the informal target of 2 percent.

But food and energy prices — and commodity  prices in general — have, of course, been rising lately. Corn and wheat prices rose around 50 percent last year; copper , cotton  and rubber  prices have been setting new records. What’s that about?

The answer, mainly, is growth in emerging markets. While recovery in advanced nations has been sluggish, developing countries — China in particular — have come roaring back from the 2008 slump. This has created inflation pressures within many of these countries; it has also led to sharply rising global demand for raw materials. Bad weather — especially an unprecedented heat wave in the former Soviet Union, which led to a sharp fall in world wheat production — has also played a role in driving up food prices.

The question is, what bearing should all of this have on policy at the Federal Reserve and the European Central Bank?

First of all, inflation in China is China’s problem, not ours. It’s true that right now China’s currency is pegged to the dollar. But that’s China’s choice; if China doesn’t like U.S. monetary policy, it’s free to let its currency rise. Neither China nor anyone else has the right to demand that America strangle its nascent economic recovery just because Chinese exporters want to keep the renminbi undervalued.

What about commodity prices? The Fed normally focuses on “core” inflation, which excludes food and energy, rather than “headline” inflation, because experience shows that while some prices fluctuate widely from month to month, others have a lot of inertia — and it’s the ones with inertia you want to worry about, because once either inflation or deflation gets built into these prices, it’s hard to get rid of.

And this focus has served the Fed well in the past. In particular, the Fed was right not to raise rates in 2007-8, when commodity prices soared — briefly pushing headline inflation above 5 percent — only to plunge right back to earth. It’s hard to see why the Fed should behave differently this time, with inflation nowhere near as high as it was during the last commodity boom.

So why the demand for higher rates? Well, bankers have a long history of getting fixated on commodity prices. Traditionally, that meant insisting that any rise in the price of gold would mean the end of Western civilization. These days it means demanding that interest rates be raised because the prices of copper, rubber, cotton  and tin have gone up, even though underlying inflation is on the decline.

Ben Bernanke clearly understands that raising rates now would be a huge mistake. But Jean-Claude Trichet, his European counterpart, is making hawkish noises — and both the Fed and the European Central Bank are under a lot of external pressure to do the wrong thing.

They need to resist this pressure. Yes, commodity prices are up — but that’s no reason to perpetuate mass unemployment. To paraphrase William Jennings Bryan, we must not crucify our economies upon a cross of rubber.

(Source: http://www.nytimes.com/2011/01/31/opinion/31krugman.html?_r=1#h[])

Asian Physical Rubber Prices - Jan 31

Asian physical rubber prices were slightly lower in places on Monday (January 31) but still near record high levels, supported by firm futures prices on the Tokyo and Shanghai exchanges and limited supply in producing countries, dealers said.

PRICES OF PHYSICAL RUBBER COMPARED TO JAN 28

NOTE - The prices quoted above are offer prices collected from traders in Thailand, Indonesia and Malaysia. They are not official prices quoted by state-run rubber agencies in those countries.
(Reuters, January 31, 2011)

Japan Rubber Stocks Up 25 Pct In 10 Days To Jan 20

Japan's crude rubber  inventories rose 25 percent in the 10 days to Jan. 20, Rubber Trade Association of Japan data showed on Monday (January 31).
Crude rubber stocks totalled 7,903 tonnes as of Jan. 20, up from 6,303 tonnes on Jan. 10. Inventories rose on Jan. 10 for the first time in two months.
The latest level was also up 15 percent from a year ago when crude rubber stocks stood at 6,877 tonnes.
Crude rubber stocks had been falling in the past couple of months, raising concerns over supply shortages as bad weather in rubber producing countries has disrupted output.
They marked a record low of 2,628 tonnes on July 20, 2010.
Rubber inventories hit a 2010 peak of 8,222 tonnes on Feb. 28, the highest since July 20, 2009.
Following are details of the association's data (in tonnes):

(Reuters, January 31, 2011)

First Rubber Cultivation Station, Budwood Centre Launched by Malaysian Rubber Board

The Malaysian Rubber Board (MRB) has scored another first with the successful establishment of the MRB Similajau Station and Malaysian Rubber Budwood Centre (MRBC).
The 1,180ha station and 45ha MRBC were expected to be the catalysts for rubber cultivation in Sabah and Sarawak, said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.
Dompok officially launched the station and budwood centre yesterday (January 28), witnessed by Sarawak Land and Development Minister Datuk Dr James Masing, MRB chairman Datuk Wira Ahmad Hamzah and MRB director-general Datuk Dr Salmiah Ahmad.
Sabah and Sarawak are potentially the major players in domestic rubber plantation due to the availability of large tracts of land in both states. They would be the beneficiaries of the high quality rubber  clones produced by MRBC, said Dompok.
The MRBC is expected to produce 3.24 million rubber budwoods per year. Its focus is in high-yielding and quality latex clones like RRIM 3001, RRIM 928, RRIM 929 and PB 350.
The centre will also produce timber clones such as RRIM 2023 and RRIM 2025.
“My ministry is targeting 500,000ha in Sarawak and 300,000ha in Sabah to be planted with high-yielding rubber trees by 2020. When these rubber areas are planted with high-quality planting materials, the production and income of rubber smallholders can also be increased,” said Dompok.
The Ministry is also expecting rubber productivity to increase to 2,000 kg per hectare per year compared with 1,470 kg per ha per year currently.
Apart from high-yielding planting materials, Dompok said: “We would like to inculcate honesty, integrity and good agricultural practices among the smallholders, particulary in the production of high-quality dry rubber content.”
In Malaysia, 94% of the natural rubber production is contributed by smallholders.
“There have been incidents whereby the dry rubber content was tampered with foreign elements like sand and small pebbles in the daily production of rubber by smallholders,” added Dompok.
Meanwhile, the MRB Similajau station houses rubber seed production area, rubber budwood nursery, polybag nursery, special management zone, commercial plantation, germplasm research facility, office and residence.
The station is aimed at providing technology transfer of new clones and agronomic practices through exhibitions, training and R&D to smallholders, private agencies and the Government.
In addition, it will provide high-quality planting materials to government and private agencies involved in the industry.
The station’s special management zone is targeted for eco-tourism development.
A senior MRB official said three more MRB stations and budwood centres – Kota Tinggi (Johor), Sg Sari (Kedah) and Bukit Kuantan (Pahang) – would be set up in Peninsular Malaysia this year.
(The Star, Malaysia, January 29, 2011)

NCDEX to re-launch rubber futures

MUMBAI, JAN 30:

The National Commodity and Derivatives Exchange (NCDEX) plans to re-launch rubber futures contract (Rubber RSS 4) on Monday.

Mr Vijay Kumar, Chief Business Officer, NCDEX, said the exchange is constantly striving to improve contract specifications to suit the needs of value chain participants, particularly hedgers.

The contract size will be one tonne and the price quotation will be in Rs /quintal. The tick size will be Rs 10.

DELIVERY CENTRES

The basis centre will be Kochi with additional delivery centres as Kottayam, Kozhikode, Thrissur, Manjeri and Palakkad.

Trading in a contract shall be permitted right until the day of expiry (20th of every month, unless otherwise specified).

Any depositor of rubber will receive the warehouse certificate immediately after the deposit at an NCDEX-accredited warehouse.

(Source: http://www.thehindubusinessline.com/markets/commodities/article1140442.ece)

Smallholders Now Earn An Average RM15,000 A Month

KOTA BAHARU, 30 Jan (Bernama) -- With the continued high demand for rubber, smallholders in the country now earn an average of RM15,000 a month from two hectares of land.

Datuk Ali Nordin Whiduddin, the deputy director-general of Risda, the Rubber Industry Smallholders Development Authority, said the average earning per day was RM429 from 80kg of the commodity sold at RM6.20 a kilo.

The price is RM8 a kilo in Kelantan, meaning bigger earnings for smallholders in the state, he told reporters after opening a seminar for Risda officers here.

Ali Nordin said that most smallholders had two hectares, or about six acres, of land which they tended to themselves following the sharp increase in rubber prices.

He expects smallholders to earn even more by 2020 with the market price, now at RM16.46 per kilo, increasing further.

Asked about the difference between the market price and what smallholders were paid, Ali Nordin said: "It is like padi and rice. Of course, rice will cost a lot more."

Ali Nordin said that Malaysia was expected to earn more from rubber this year than the RM25 billion in 2010 when the market price was RM10 a kilo.

-- BERNAMA

(Source: http://www.bernama.com/bernama/v5/newsgeneral.php?id=560576)

Asian rubber: tyre makers buy on dips

Singapore  (january 30, 2011) : a drop in rubber prices from record highs spurred buying from tyre makers outside of main consumer china which turned to domestic inventories, dealers said on wednesday. indonesia's sir20 grade changed hands late on tuesday at 251.50 us cents a pound ($5.54 a kg) for march, down slightly from an all time high at 252 cents quoted on monday, when rubber futures in tokyo and shanghai hit a record on persistent supply concerns.
there were no reports of deals for thai and malaysian grades, suggesting that main consumers, including indian tyre makers, are waiting for more correction in prices. "i am sure potential buyers will be on the sidelines in the next few days," said a dealer in singapore. "of course processors like us want to sell, but if buyers don't want to buy, then you can't do anything."
rubber prices in southeast asia have struck a series of record high since october after unusually heavy rains blamed on the la nina weather phenomenon curbed supply in thailand, indonesia and malaysia. thai rss3 was offered near record high at $5.75 a kg, while malaysian smr20 was quoted at between $5.50 and $5.55 a kg.
in the futures market, the newly listed july rubber contract on the tokyo commodity exchange was at 453.6 yen a kg after opening at 460.2 yen, tracking broad weakness in commodities markets. the previous benchmark for june delivery fell 19.5 yen to 457.1 yen. it hit a record high of 484.9 yen on monday.
sixth month tokyo rubber will fall to 397.7 yen per kg over the next four weeks, according to wang tao, who is a reuters market analyst for commodities and energy technicals. a wave (iv) correction has started after a wave (iii) has peaked at 484.90 yen, based on its wave pattern and a fibonacci retracement analysis on the rise from 256.70 yen to 484.90 yen.
dealers said rains persisted in parts of indonesia, which could help cushion the fall in futures prices. supply in main producer thailand would even get tighter in february, when the dry season starts and rubber trees produce less latex. "we struck some deals last night, then buyers disappeared. i think there is still a chance for the price to go up again," said a dealer in indonesia's main growing island of sumatra.
"but china and india are in their long slumber," he added. dealers said tyre makers in china turned to warehouses in shanghai because rubber kept there was usually a few cents lower than the prices quoted by sellers in southeast asia. rubber inventories in warehouses monitored by the shanghai futures exchange fell 4.6 percent to 65,532 tonnes from a week earlier, the exchange said on friday.
weekahead a rebound in tokyo and shanghai futures could eventually trigger buying from china on fears that prices could rise further, given worries about supply.
"demand from china is dead, and india is also dead," said another dealer in singapore. "however, the majors are buying every day. bridgestone, goodyear and conti are still buying march shipment." french-listed natural rubber group siph expects rubber demand to remain strong in 2011, partly due to healthy appetite in emerging countries such as china and india, its deputy chief executive told reuters.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1149983:asian-rubber-tyre-makers-buy-on-dips.html?hl=rubber)

Rubber futures in India fell this week on sluggish demand

Rubber futures in India fell this week on sluggish demand in the physical market while in global market rubber futures rose on the back of firm overseas demand and supply concerns due to adverse weather in growing regions. The most-active contract of rubber on the Tokyo Commodity Exchange gained as much as 3.2 percent on Friday to 474.8 yen per kilogram ($5,725 a ton).
Natural rubber demand may grow 4.6 percent this year, boosted by strong vehicle sales, with consumption continuing to outpace supply in coming years, according to the International Rubber Study Group.
Global consumption may gain to 11.2 million metric tons in 2011 and 11.6 million tons next year, said, the group’s secretary general. The supply deficit will support prices of the commodity used to make tires and gloves, he said.
At NMCE, February contract declined by 6.064 % to Rs 22629 while March contract fell by 6.18 % to 23186 per quintal. Spot rates of rubber on Friday were (Rs/kg): Spot rates were (Rs/kg): RSS-4: 224 ; RSS-5: 215 ; ungraded: 212; and latex 60 per cent: 151.

(Source: http://www.commodityonline.com/news/Commodity-TrendsPeppersoybean-complex-weaken-36059-3-1.html)

Malaysia rolls out pivotal facilities to boost rubber output

KUALALUMPUR (Commodity Online) : In a bid to promote rubber cultivation in Malaysia, the Malaysian Rubber Board (MRB) has established two pivotal facilities.
MRB Similajau Station and Malaysian Rubber Budwood Centre (MRBC), are touted the first of their kind. The station’s functioning is to facilitate technology transfer of new clones and agronomic practices, through various supply systems and training measures while MRBC shall produce 3.24 million rubber budwoods a year.
Similajau Station, spread across 1,180ha and the MRBC covering 45 ha are widely expected to boost rubber cultivation in Sabah and Sarawak; two other provinces in Malaysia where the government intends to plant high-yielding rubber trees in 300,000 ha and 500,000 ha respectively by 2020.
The facilities
MRB Similajau station has in its fold, a rubber seed production area, rubber budwood nursery, polybag nursery, special management zone, commercial plantation, germplasm research facility along with offices and residences. The station would be instrumental in supplying high-quality planting materials to government as well as private agencies.
Eco tourism development is also in the offing.
MRBC shall give forth high-yielding varieties of rubber-- RRIM 3001, RRIM 928, RRIM 929 and PB 350—as well as timber clones such as RRIM 2023 and RRIM 2025.
As a part of the initiative, government expects rubber output in Malaysia to jump to 2,000 kg per hectare per year from the current figure of 1,470 kg per ha per year.

(Source: http://www.commodityonline.com/news/Malaysia-rolls-out-pivotal-facilities-to-boost-rubber-output-36054-3-1.html)

Quiet week ahead for rubber market

The Malaysian rubber market is likely to be remain quiet next week as most market players will be away for the Federal Territory and Chinese New Year holidays.
However, the market will continue to track trends on the Tokyo rubber futures and Shanghai rubber futures markets.
For the week just-ended, rubber prices were rangebound over concerns that Thailand, the major rubber producer, could face a supply shortage due to floods.
On a Friday-to-Friday basis, the Malaysian Rubber Board's official physical seller price for tyre-grade SMR 20 rose 3.5 sen to 1,649.5 per kg from 1,646 sen per kg last week.

The latex-in-bulk slipped four sen to 1,024.5 sen per kg from 1,028.5 sen per kg previously.
The unofficial seller closing price for tyre-grade SMR 20 declined 10 sen to 1,646.5 sen per kg from 1,656.5 sen last week, while latex-in-bulk slipped seven sen to 1,023.5 sen per kg from 1,030.5 sen previously.
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20110129111315/Article/index_html)

NMCE Rubber gains on fresh buying

NMCE rubber futures witnessed high volatility on Thursday. Futures started the day on positive note on fresh buying on lower levels. TOCOM futures showed recovery from 2 week’s low on short covering on lower levels.
However, active selling at higher levels pulled down the prices. Reports of increased in supply because prevailing higher prices encouraged farmers to go for further tapping activity.
Oil fell after the Labor Department reported a bigger than forecast gain in jobless claims, and data showed orders for U.S. durable goods decreased in December. Thus, mixed spot market activity and down crude oil prices weighed on sentiments and futures ended on negative note.
The rubber futures are projected to extend the bearish trend on Friday. TOCOM rubber June futures are also trading lower at ¥465.7.0 per Kg. falling crude oil prices also pressurizing the prices.
Thus, on cues from international market Indian futures might trade higher during the day. Reduced buying from China, major natural rubber consumer ahead of week long holidays due to Lunar New Year is further pressurizing the prices.
Indian domestic market is also witnessing a choppy trade as buyers are reluctant to buy at these levels. Thus, on cues from all above stated factors natural rubber prices are expected to fall today. However, short covering at lower levels can not be overruled.
Factors to Watch For
The physical price of natural rubber in Thailand, the largest exporter, dropped 0.8 percent to 176.55 baht ($5.69) per kg, according to Rubber Research Institute of Thailand
President of Cochin Rubber Merchants Association attributes the price rise to the surge in international prices and withholding of stocks by growers. Productivity of the domestic rubber plantations has come down as 30% of the area is overdue for replanting
According to Association of Natural Rubber Producing Counties (ANRPC), supply in January may have increased 2.9% from a year earlier to 866,000 tons. Farmers in major producing countries have been encouraged to tap old dormant trees due to prevailing high prices in market
According to latest reports nearly 16,000 hectares in Thailand have been destroyed due to strong winds which may further add to the prices rise
Rains are expected to spread across the southern provinces of Thailand this week, the country’s Meteorological Department said on its website. The south produces about 80 percent of Thailand’s rubber
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. Market has a lot of traders initiating from both sides but larger traders may be liquidating into the higher prices. The market may be vulnerable to large price swings as shorter time frame traders attempt to trade from both sides of the market but liquidating before end of- day. Often a signal of a market turns near-term or continued volatility.
Japan Futures (TOCOM)
The TOCOM active June contract, Prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward.
Shanghai Futures (SHFE)
The SHEF active June contract, Prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward.

(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-gains-on-fresh-buying-21537.html)

First rubber cultivation station, budwood centre launched

BINTULU: The Malaysian Rubber Board (MRB) has scored another first with the successful establishment of the MRB Similajau Station and Malaysian Rubber Budwood Centre (MRBC).

The 1,180ha station and 45ha MRBC were expected to be the catalysts for rubber cultivation in Sabah and Sarawak, said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

Dompok officially launched the station and budwood centre yesterday, witnessed by Sarawak Land and Development Minister Datuk Dr James Masing, MRB chairman Datuk Wira Ahmad Hamzah and MRB director-general Datuk Dr Salmiah Ahmad.

Sabah and Sarawak are potentially the major players in domestic rubber plantation due to the availability of large tracts of land in both states. They would be the beneficiaries of the high quality rubber clones produced by MRBC, said Dompok.

The MRBC is expected to produce 3.24 million rubber budwoods per year. Its focus is in high-yielding and quality latex clones like RRIM 3001, RRIM 928, RRIM 929 and PB 350.

The centre will also produce timber clones such as RRIM 2023 and RRIM 2025.

“My ministry is targeting 500,000ha in Sarawak and 300,000ha in Sabah to be planted with high-yielding rubber trees by 2020. When these rubber areas are planted with high-quality planting materials, the production and income of rubber smallholders can also be increased,” said Dompok.

The Ministry is also expecting rubber productivity to increase to 2,000 kg per hectare per year compared with 1,470 kg per ha per year currently.

Apart from high-yielding planting materials, Dompok said: “We would like to inculcate honesty, integrity and good agricultural practices among the smallholders, particulary in the production of high-quality dry rubber content.”

In Malaysia, 94% of the natural rubber production is contributed by smallholders.

“There have been incidents whereby the dry rubber content was tampered with foreign elements like sand and small pebbles in the daily production of rubber by smallholders,” added Dompok.

Meanwhile, the MRB Similajau station houses rubber seed production area, rubber budwood nursery, polybag nursery, special management zone, commercial plantation, germplasm research facility, office and residence.

The station is aimed at providing technology transfer of new clones and agronomic practices through exhibitions, training and R&D to smallholders, private agencies and the Government.

In addition, it will provide high-quality planting materials to government and private agencies involved in the industry.

The station’s special management zone is targeted for eco-tourism development.

A senior MRB official said three more MRB stations and budwood centres – Kota Tinggi (Johor), Sg Sari (Kedah) and Bukit Kuantan (Pahang) – would be set up in Peninsular Malaysia this year.

(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/1/29/business/7896881&sec=business)

A shift in dynamics has led to the exuberance in prices of key commodities

Major structural changes in the dynamics of the global commodities scene have propelled world commodities to staggering record prices.

Crude oil, gold, coal, iron ore, copper, soybean and wheat closed on a firm note last year registering price increases of between 30% and 50% but tin and rubber are charting new highs week after week.

As of yesterday, crude oil had risen 16% to US$85, gold 20% (US$1,310), copper 37% (US$9,440), soybean 48% (US$1,390) and 45% wheat (US$839).

Over the past decade, there have been significant merger and acquisitions as well as consolidation among world steel giants, iron ore mining and fertiliser companies thus creating mammoth entities which controlled the world's mineral-based commodities.

The green fuel hype in mid-2000 also saw major food-based agriculture crops such as soybean, wheat and sunflower being replaced by corn for the production of bio-ethanol.

This had triggered a debate among world leaders, economists and NGOs on whether food crops should be shared to generate bio-diesel.

Food for thought

Global food security is in a dire situation as exceedingly high crude oil and natural gas prices had increased the cost of production. This in turn translates into higher demand for bio-fuels.

Food prices have been on the rise over the last 10 years. Rice, soybean and corn prices have reached record highs and the increasing cost of grains has led to more expensive meat, poultry, eggs and dairy products.

Strong demand from China and India have also put pressure on the prices of food commodities worldwide.

Exacerbating the situation is the unpredictable global weather which had been wreaking havoc on the production of agricultural crops.

According to the latest United Nation's Food and Agriculture Organisation and the Organisation for Economic Co-operation and Development Agriculture report, food prices would increase in the next 10 years.

“The global economic recovery, rising world population and the rapid growth in the emerging economies will also increase both the demand and trade of food commodities.”

The China factor

Credit Suisse in its Commodity Outlook 2011 says global economic growth will remain supportive of commodities with strong trade activities in the emerging economies and in the G7 countries - the US, Japan, Germany, Britain, France, Canada and Italy.

China's demand for strategic base metals and agriculture crops would be strong while the economic recovery in the G7 countries would be the catalysts to boost commodity prices this year.

“Again the development in China will be a key influence on the global supply and demand for many types of commodities this year,” says an analyst with a bank-backed brokerage.

Important issues arising from the substantial changes in commodity prices particularly agriculture-based food crops would have a significant impact on global economy and inflation.

“This has a big impact on the emerging economies which share of food prices in its consumer price baskets is higher than the developed nation.

“Most notable is China which had policies to limit food price inflation,” says Credit Suisse.

However, the risk of having food price inflation policies like price caps and trade restrictions would eventually reduce the effectiveness of price mechanism in the adjustment process.

For example, if major exporters were to impose export restrictions, the reduction in supply to the global market could result in significantly higher food prices in the longer term.

Credit Suisse expects commodities used heavily in the construction, infrastructure, production and food-based goods to attract the most demand this year. This include base metals and agriculture commodities, which would closely track the price movements of major energy-based commodities like crude oil and coal.

ETP agenda

The devastating floods in Australia early this month had led to the focus on coal. A disruption in coal exports from Australia to China could result in power shortage in factories which in turn could derail China's economy .

On the local front, commodity-related custodians are mostly positive on the crude palm oil (CPO), rubber, tin and timber this year.

Performance Management and Delivery Unit (Pemandu) director for palm oil, agriculture and rubber industry John Low says CPO status as the world's most tradable vegetable oil has prompted the Government to spruce up the upstream and downstream operations under the Economic Transformation Programme (ETP). It will focus on generating an additional RM125bil to the gross national income (GNI) of about RM178bil in 2020.

Low says the contribution of RM33.1bil from upstream and RM14.1bil from downstream were based on price assumption of RM2,350 per tonne for CPO, RM2,800 for palm kernel oil and RM475 for fresh fruit bunches (FFB).

The Government is also pushing for accelerated re-planting programme mainly to clear the backlog of 365,414ha of oil palm oil trees of above 25 years old, which are largely low-yielding.

Furthermore, the targeted 26 tonnes per hectare national average for palm oil will not be just on replanting but also holistic initiatives such as implementing codes of practices, clustering smallholders into cooperatives and increasing the number of MPOB agriculture officers.

Malaysian Rubber Board’s Datuk Dr Salmiah Ahmad says many rubber estates have been cleared to make way for oil palm which resulted in a serious shortage of natural rubber and rubber wood.

“Stringent FFB quality management at mill gates to weed out-sub standard FFB will also be implemented, compelling planters to improve quality control.

“This target is also to provide quality planting materials in the plantations and smallholders. There are planting materials available today that can give up to 30 tonnes per ha.”

The target of 26 tonnes per hectare as a national average was not impossible since Malaysia has an average yield of 21 tonnes per ha with the top 15 Malaysia companies producing an average of 24.5 tonnes per ha in 2009.

CPO which was traded 30% higher in 2010, is testing a new support level of RM3,800 to RM4,000 per tonne before the end of the first quarter this year.

Resilient rubber

As a strategic commodity, rubber is also getting special attention. The Government has allowed rubber hectarage to be maintained at one million. There will be additional one million ha via suitable land bank in Sabah and Sarawak apart from increasing replanting activities to 40,000 ha per year from 20,000 ha currently. Contribution from rubber is expected to reach RM48.9bil by 2020.

Malaysian Rubber Board director-general Datuk Dr Salmiah Ahmad says many rubber estates have been cleared to make way for oil palm which resulted in a serious shortage of natural rubber and rubber wood. This situation has also made it difficult for the multi-billion ringgit domestic integrated rubber industry such as the rubber gloves and rubberwood furniture producers.

Realising the need to quickly address the short supply situation, a 10-year strategy for the rubber industry and the Malaysian Rubber Board (MRB) were launched in May last year.

The move is to ensure continued viability of a fully integrated rubber industry which holds equal importance to palm oil in the economy.

Malaysia Smelting Corp’s Datuk Seri Dr Mohd Ajib Anuar predicts that tin price may hit US$40,000 per tonne in the next five years.

The MRB Strategies 2010-2020 covered the empowerment of the entire rubber sub-sectors - upstream, midstream and downstream.

In the upstream sector, MRB is tasked to enhance national rubber productivity through the development of high-yielding clones as well as the adoption of mechanised and automatic system in rubber plantations.

Rubber grades SMR 20 and Latex-in-Bulk are currently trading at new highs at RM16.70 and RM10.34 per kg respectively.

Tin making come back

Tin is also making a strong comeback given the consistently high tin price which is trading at record price of US$29,200 per tonne.

Malaysian Chamber of Mines president Datuk Seri Dr Mohd Ajib Anuarpredicts that tin price may hit US$40,000 per tonne in the next five years. The Perak state government has enacted the Mineral Act to protect explorers and miners given the capital intensive nature of the mining business.

Ajib says a revival in the mining sector should materialise if the primary mineral deposits belt on the east coast of Peninsular Malaysia is discovered by experts.

“A confirmed discovery of tin, gold, copper and other minerals could lead to a significant transformation in the local mining sector,” adds Ajib.

He says mining should be undertaken on a large scale. Unlike mining for secondary tin deposits, prospecting and discovery of primary tin deposits are capital intensive ventures that could in turn attract major foreign investors.

Malaysian Timber Board’s Dr Jalaluddin Harun targets timber product exports to achieve RM53bil by 2020.

Timber targets

Meanwhile, timber which is not part of the National Economic Key Areas of the ETP is striving to achieve its targets under the National Timber Industry Policy (NATIP) by 2020, says Malaysian Timber Board director-general Dr Jalaluddin Harun.

The NATIP targets to achieve RM53bil in exports of timber products by 2020 based on an annual export growth of 6.4% with 60% of the exports to be derived from value-added products from 40% currently.

Malaysia will need new market expansions, usage of alternative raw materials like plantation timber i.e. biomass, fibre and agri-residues, rattan and bamboo.

The local timber industry players should also look at design, innovation and technology in the area of bio-technology, nano and high performance green buildings.

(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/1/29/business/7881159&sec=business)

Tokyo rubber futures recover

Tokyo  (january 29, 2011) : key tokyo rubber futures recovered earlier losses to end slightly higher on friday, as firm shanghai rubber prices underscored a strong outlook for demand. the benchmark rubber contract on the tokyo commodity exchange for july delivery rose as high as 469.5 yen, up 2.2 yen, or 0.5 percent, before settling at 469.1 yen.
it fell as much as 11.2 yen, or 2.4 percent, to 456.1 yen earlier, dragged lower by declines in broader commodity prices and as investors, wary of the recent rapid pace of price increases, closed positions. the market fell 1.4 percent in the week, posting its first weekly loss in a month. the benchmark contract hit a record peak of 474.8 yen on monday. the most active rubber contract on the shanghai futures exchange for may deliver rose as high as 40,945 yuan ($6,221) per tonne.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1149348:tokyo-rubber-futures-recover.html?hl=rubber)

Smallholders to gain from strong prices

FROM a meagre average income of RM276 per month in 2002, more than 260,000 rubber smallholders have been received a monthly income of RM2,592 per month last year – thanks to high rubber prices brought about by strong demand from emerging economies.

The smallholders’ income are likely to go up further, says Malaysian Rubber Board director-general Datuk Dr Salmiah Ahmad.

The monthly income of the smallholders had risen from RM1,000 in 2005 to RM2,000 in 2008.

However, the declining rubber prices amid a high supply situation in 2009 has put a dent on their monthly income when it fell to RM1,400.

Farm gate price of cuplumps sold by rubber smallholders has increased from RM2.87 per kg in 2003 to RM9.20 per kg last year.

Interestingly, the number of smallholders has also gone up from 189, 279 in 2002 to 264,894 in 2009, indicating an interest in rubber tapping as a full-time job among the people.

Salmiah says the socio-economic importance of rubber in Malaysia cannot be denied as it has sustained the livelihood of the smallholder families.

“The economic well-being of the local smallholders therefore is of considerable importance to ensure continuous stability in the rural sector,” says Salmiah.

Rubber smallholders contributed about 94% of the country’s total rubber production which stood at 857,000 tonnes in 2009.

Last year, the smallholders produced over 800,790 tonnes of rubber with total yield of 1,500 kg per ha per year compared with major estate players’ production of over 56,230 tonnes at 1,630 per kg per ha per year.

While the smallholders may be producing more than the estate holders, Salmiah says the Government expects higher yields from them.

“There is a strong concern over the stagnant rubber yield per ha per year among the smallholders,” says Salmiah.

From 2007 to 2010, the rubber smallholders’ yield was between 1,414 and 1,470 per ha per kg per year.

While it may be difficult for the smallholders to undertake replanting during current high prices, MRB will encourage them to plant the 1Malaysia clone RRIM 3001, Slamiah says.

“This high yielding clone is tappable in less than five years with the average yield in the first three years of between 2,264 and 2,792 per kg per ha per year and could surpass the 3,000 kg per ha per year.

“Smallholders can also generate new income as the clone also produce high wood volume due to its high growth vigour.

“At the age of 10 years, the average tree volume is 0.89 cubic metre per tree. Smallholders would be able to increase their income by replanting using this new clone which is high in the production of latex and timber,” she says.

(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/1/29/business/7878901&sec=business)

Commodity Trading Tips for Rubber by KediaCommodity

Rubber yesterday traded with the negative node and settled -3.91% down at 22190 after the wednesday's yesterday as the nation was celebrating Republic Day. The day before yesterday, quotes in the ready market retreated from the life time high level while futures extended its decline. In the international market, naturalrubber prices in Bangkok, Malaysia and Indonesia dropped from the record peaks that prompted tyre manufacturers to enter the markets while China stayed off . ANRPC estimates global NR production to rise 2.9% in Jan on increased tapping Rubber consumption in China and India seen up at 9% and 5.2% respectively. ANRPC Vietnam’s rubber exports expected to rise 47% in Jan (YoY)  Thai Sri trang to raise $262 million in Singapore IPO NR production in Ivory Coast expected to rise 5% in 2011(Ivorian rubber association). In yesterday's trading session Rubber has touched the low of 22169 after opening at 23350, and finally settled at 22190. For today's session market is looking to take support at 21746, a break below could see a test of 21302 and where as resistance is now likely to be seen at 23057, a move above could see prices testing 23924.

Trading Ideas:

Rubber trading range is 21305-23927.

Rubber yesterday traded with the negative node and settled -3.91% down

Rubber daily stocks at Shanghai exchange came up by 70 tonnes

Spread between Rubber FEB & MAR contracts yesterday ended at 509.00. Spread yesterday traded in the range of 509 to 680.

RUBBER IS TESTING SUPPORT ON PROFIT BOOKING STILL INTERNATIONALLY FUNDAMENTALS ARE STRONG

NMCE accredited warehouses Rubber stock rosed by 142kgs to 10813kgs.

(Source: http://www.topnews.in/commodity-trading-tips-rubber-kediacommodity-2308146)

Natural Rubber Output Up 13 Per Cent Last Year

BINTULU, Jan 28 (Bernama) -- Malaysia's natural rubber production rose 13 per cent to 970,000 tonnes last year compared with an output of 857,000 tonnes registered in 2009, said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok Friday.

"In 2010, the natural rubber industry earned the country RM33 billion in revenue, which was an increase of 32 per cent, when compared with the RM25 billion raked by the country in 2009," he said when officiating the Malaysian Rubber Board's research station 68 kilometres from here.

He said the improved earnings indicated that the natural rubber industry was an important contributor to the nation's economic growth.

The industry was reaping further gains with tyre grade, SMR 20, fetching an all-time high of RM16.57 per kilogramme hence uplifting the socio-economic status of about 40,000 rubber smallholders in the country.

"With the current buoyant rubber price, an average smallholder with a smallholding of 2.3 hectares and a latex output of 1,500 kilogrammes per hectares can reap a monthly return of RM3,600," he said.

Dompok added, as a long-term step to assist smallholders, several strategies have been drawn up to assist smallholders which included supplying them with high-yielding clones.

He said the ministry has targetted 500,000 hectares of land in Sarawak and 300,000 hectares in Sabah to be planted with high-yielding clones by 2020.

"The ministry has also set a target to increase output per hectare to 2,000 kilogrammes in 2020 against the current output of 1,470 kilogrammes," Dompok added.

-- BERNAMA

(Source: http://www.bernama.com/bernama/v5/newsindex.php?id=560118)

Rubber Expo 2013 to inaugurate new convention center

Akron, OH - The Rubber Division of the American Chemical Society (ACS) has announced its intentions for the “Rubber Expo and Advanced Materials in Healthcare” to be the inaugural show at the Cleveland Medical Mart & Convention Center on October 8-10, 2013. The international show will include exhibits, technical symposia, educational courses and other special events.

This year, the Rubber Division created a partnership to help expand the show to include for the first time Advanced Materials in Health Care. Supporting partners include the Austen Bioinnovation Institute, BioEnterprise Inc., The University of Akron College of Polymer Science and Polymer Engineering, Northeastern Ohio Universities Colleges of Medicine and Pharmacy (NEOUCOM), Cleveland International Exposition Center, the Cleveland Medical Mart and Convention Center, Cleveland Clinic Innovations, BioOhio and PolymerOhio, Inc.

(Source: http://www.rubberworld.com/news.asp#16082)

Tokyo Futures Fall On Drop In Broad Commodities

Key Tokyo rubber futures fell on Friday (January 28), dragged lower by declines in broader commodities prices and as investors, wary of the recent rapid pace of price
increases, closed positions.
The benchmark rubber contract on the Tokyo Commodity Exchange for July delivery fell 7 yen or 1.5 percent to 460.3 yen per kg as of 0031 GMT.
The contract rose nearly 4 percent to as high as 474.8 yen on Thursday (January 27), and hit a record high of 474.8 yen on Monday (January 24).
At current levels the contract is set for a weekly drop of about 3 percent, the biggest in two months, after gaining about 4 percent last week.
The most active rubber contract on the Shanghai futures exchange for May deliver closed at 40,550 yuan ($6,162) per tonne on Thursday (January 27), up from Wednesday's 39,280 yuan. The contract rose as high as 40,830 yuan, just below a record high of 41,200 yuan hit on Monday (January 27). Volume stood at 630,734 lots.
Traders have said supply concerns, record high physical rubber prices and a solid demand outlook provide a strong case for long-term price increases, but investors may close positions in the near term, especially ahead of China's holidays when buying by the world's largest rubber consumer halts.
China begins the week-long Lunar New Year holiday on Feb.2.
U.S. crude futures extended declines to hit a near two-month low on Friday (January 28), weighed down by talk of OPEC raising output and weak economic data.
The yen nursed broad losses on Friday (January 28) after Standard & Poor's cut Japan's credit rating by a notch, though it fared relatively better against the dollar, which had troubles of its own.
(Reuters, January 28, 2011)

Global Natural Rubber Prices To Remain Firm

The bullish trend in natural rubber prices could continue at least till April due to the tight supply situation. Until April, a further tightness in supply will be seen due to the seasonal wintering of trees. However, from May until the year-end, supply would be back to normal, provided there are no major calamities. During wintering, production of natural rubber is known to fall.
The NR supply is expected to increase, but at a rate lower than five per cent this year. Even this is on the assumption that the weather will be normal and uprooting of aged trees will be low. Production by the ANRPC countries is expected to increase to a maximum of 9.87 million tonnes (mt), up 4.8 per cent from last year. This is in the event that the annual uprooting of rubber trees is at two per cent of the total area under cultivation.
Due to low re-planting in 2004, only 0.233 million hectares that is equivalent to 3.3 per cent of the yielding area last year, will be available for tapping this year. Moreover, high prices have prompted growers to retain aged trees, postponing replanting in the last two years. Over-aged trees and a further decline in yield may sometimes prompt farmers to uproot the trees in 2011.
In November last year, trees on 16,000 hectares were lost due to heavy winds and floods in Thailand. However, the yielding area expanded as growers tapped dormant trees last year. But the possibility of bringing more areas with dormant trees into production is limited. Rising labour costs and the possibility of changes in prices could prompt growers to keep the trees idle.
The improvement in average yield would be marginal as growers have already exploited their available short-term means on the heels of high prices. The existing yielding area is dominated by trees planted in the 1980s and the productivity of these trees would have dropped drastically on account of ageing.
There could be possible damage to yield potential due to unscientific over-exploitation of trees prompted by high prices. Abnormally high prices have made retaining low-yielding aged trees economically viable. For example, if the price of rubber was US $2 in 2007 and the yield of a 30-year-old tree was 1,100 kg a hectare, a grower would have got $2,200. This year, even if the yield are to drop to 500 tonnes and at around US $5 a kg, the grower would only get a return of $2,500.
Besides this, production in non-traditional regions where productivity potential is lower is also a concern. This is because growers in these regions do not have adequate experience in the required skills and the agro-climatic factors are also not very favourable.
Asian physical NR prices were high towards the end of the 3rd week of January, 2011 as futures prices on the Shanghai market hit a record high, with supply remaining thin from leading NR producers, according to reports (image).
The rubber price in Thailand, the world's largest exporter, reached a record of 172.80 baht (US$5.65) per kilogram on 20th January. Demand for NR has grown based on rising car sales led by China and India. Supply may also lag behind demand as Thai production, disturbed by heavy rain last year, drops further as growers tend to avoid tapping during the wintering season that begins in February, reducing latex output.
Rubber production in Thailand during the season, which runs until May, normally shrinks
by 45 percent to 60 percent from peak production. The low-production period also occurs at the same time in northern Indonesia and Malaysia, lowering output.
According to reports, buyers are still in the market despite high prices to secure the commodity amid increasing supply concerns. Futures also gained amid speculation that buyers in China, the largest consumer, may boost purchases to replenish reserves before the Lunar New Year holiday. The week-long holiday starts from 2nd February.
Natural-rubber inventories in China declined 175 tons to 68,675 tons, based on a survey of 10 warehouses, according to the Shanghai Futures Exchange, which is about 55 percent lower than last year's peak of 151,832 tons.
China's economy expanded 10.3 percent in 2010 to $6.04 trillion, the fastest pace in three years, which compares with 9.2 percent in 2009. China's vehicle sales may grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, according to forecasts by the China Association of Automobile Manufacturers.
The unprecedented upswing in NR prices seen at the Colombo Auctions also, breaking all recent records, should be watched with caution by the producers and consumers alike for contrasting reasons.
(Daily Mirror, Sri Lanka, January 28, 2011)

Harrisons Malayalam scouting Africa for new rubber plantations

KOCHI (Commodity Online) : With current rubber plantations in India maturing or getting old, Harrisons Malayalam, India’s largest rubber plantation and top producer of natural rubber is scouting Ethiopia, Cameroon, Ghana and Indonesia for acquiring fresh plantations.
Besides, HM have plans for India’s North Eastern state of Tripura, where the conditions have been proven to be ideal for rubber plantations.
The company already owns 7000 ha in plantations but is producing only half of its total annual capacity of 10,000 tons, reported The Financial Express.
HM may opt for a JV or leasing of land to the tune of 10,000 ha, as demand from tyre, latex, sports good and glove manufacturers surge.
Natural rubber deficit in India is expected to surge to 5,00,000 tons by 2015 as against the current 1.5 lakh tons. The company expects the prices of rubber to stay above Rs.200 levels.
It intends to plant RR11 400, 429, 430 in the proposed plantations besides carrying out re-plantation of RR11400 series that would provide 25% additional yield.
Back in 2010, the India government had announced it would spare no efforts in helping companies and corporations to acquire land in countries like Africa for plantation and farming purposes.

(Source: http://www.commodityonline.com/news/Harrisons-Malayalam-scouting-Africa-for-new-rubber-plantations-36020-3-1.html)

Rubber Demand to Grow 4.6% in 2011, Outpace Supply, Group Says

Natural rubber demand may grow 4.6 percent this year, boosted by strong vehicle sales, with consumption continuing to outpace supply in coming years, according to the International Rubber Study Group.

Global consumption may gain to 11.2 million metric tons in 2011 and 11.6 million tons next year, said Stephen Evans, the group’s secretary general. The supply deficit will support prices of the commodity used to make tires and gloves, he said.

Rubber gained to a record this week, extending a 50 percent advance in 2010, as rising car sales led by China and India boost demand, and rains disrupted tapping in key growing nations ofSoutheast Asia. Natural rubber demand in China, the biggest consumer, may rise 9 percent this year, said the Association of Natural Rubber Producing Countries.

“From the fundamental point of view, we don’t see relief coming in the next few years because of over-demand and undersupply,” said Evans. “The price is likely to stay firm,” he said.

Demand may rise further to 13.1 million tons in 2015 and 15.4 million tons in 2020, while production may be about 13.8 million tons, said Evans. The estimates are based on normal production conditions, excluding a potential increase in supply from new plantings and increased tapping driven by high prices, he said.

Above-average rain from a La Nina weather event has curbed output in Indonesia, Malaysiaand Thailand, the biggest producer. The weather pattern may last until the middle of the year, causing higher-than-usual rainfall in Thailand during January to April, the Thai Meteorological Department has said.

Further Tightness

“If the demand stays strong, we’ll see further tightness in the market,” Evans said. Still, it isn’t “worrisome, as high prices will encourage tappers,” he said.

The most-active contract on the Tokyo Commodity Exchange gained as much as 3.2 percent today to 474.8 yen per kilogram ($5,725 a ton).

Futures fell 4.6 percent in the past two days after reaching a record 484.9 yen on Jan. 24 on worries China may take additional steps to curb inflation, reducing demand. China raisedinterest rates twice in the fourth quarter in a bid to choke off inflation.

“In the fast-moving economy like China, even a significant move may not be enough to slow it down,” Evans said. “There is no fundamental evidence that demand will go off a cliff.”

Natural rubber consumption in China may rise to 3.6 million tons this year and India’s consumption may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

China Growth

China’s economy grew 10.3 percent in 2010, the fastest pace in three years and up from 9.2 percent a year earlier, the government said this month. China’s vehicle sales may grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, according to a forecast by the China Association of Automobile Manufacturers.

Natural-rubber supply from members of the Association of Natural Rubber Producing Countries, which represent 92 percent of global supply, may expand 4.8 percent this year to about 9.9 million tons, the group said Jan. 25. The forecast is lower than an “optimistic target” by member governments of 7.7 percent growth to 10.2 million tons, it said.

The International Rubber Study Group counts 16 countries plus the European Union as members, according to its website. Thailand and Malaysia, the world’s largest and third-largest producers, are part of the group, while Indonesia, the second- largest grower, is not.

(Source: http://www.bloomberg.com/news/2011-01-27/natural-rubber-demand-to-expand-4-6-in-2011-outpace-supply-group-says.html)

Price Of Rubber Doubled Last Year

The price obtained from rubber production has doubled from year 2009 to 2010, according to the Ministry of Plantation Industries.
“The price of one Kg of rubber on average in 2009 was Rs.202.79 but in 2010 it was Rs. 402.75,” Minister of Plantations industries Mahinda Samarasinghe said.
He said rubber production had also increased from 137,000 metric tonnes in 2009 to 150,000 metric tonnes in 2009. In certain instances the price goes up to Rs. 570 or 580, he added.
However the Minister was unclear on the figures of how much loss the industry incurred due to the inclement weather conditions in the past months. He stated that at present demand overrode the necessary supply and expressed his hope that local produce could fulfill the total requirement needed for the production of value added rubber products.
(Daily Mirror, Sri Lanka, January 27, 2011)

Tokyo rubber jumps four percent

Tokyo  (january 28, 2011) : key tokyo rubber futures rose nearly 4 percent on thursday as a rally in shanghai rubber futures encouraged investors to buy back the commodity after the market hit a near two-week low the day before on profit-taking. the benchmark rubbercontract on the tokyo commodity exchange for july delivery, which debuted on wednesday, settled at 467.3, up 10.1 yen or 2.2 percent at 457.2 yen. it rose as high as 474.8 yen, up 17.6 yen or 3.8 percent.
the most active rubber contract on the shanghai futures exchange for may deliver closed at 40,550 yuan ($6,162) per tonne on thursday, up from wednesday's 39,280 yuan. the contract rose as high as 40,830 yuan, just below a record high of 41,200 yuan hit on monday. volume stood at 630,734 lots.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1148979:tokyo-rubber-jumps-four-percent.html?hl=rubber)

Vietnam’s exports up 18 percent in January

(VOV) - The revenue from Vietnam’s exports reached US$6 billion in January, up over 18 percent from the same period last year thanks to higher priced commodities, said the General Statistics Office on January 27.

Rubber exports reached US$337 million, a rise of 46.5 percent in volume and 146 percent in value while oil and gas exports increased by 23.7 percent in volume and 58 percent in value. Fisheries exports also rose by 30 percent in value, reaching US$400 million. 
However, even with a modest growth of just over 10 percent, garments were still the country’s biggest currency earner, raking in US$900 million. 
Compared to the previous month in 2010, total export turnover decreased by 20 percent due to a global drop in trade during the new year holidays. 
Also in January, the turnover of imports was US$7 billion, up 15.5 percent, a drop of US$1 billion and accounting for 16.67 percent of total export turnover. 
The foreign invested sector contributed 3.17 billion USD to the country’s total export turnover while importing only US$2.9 billion. Meanwhile, the domestic economic sector contributed US$2.8 billion to exports and imported US$4.1 billion worth of materials.

(Source: http://english.vovnews.vn/Home/Vietnams-exports-up-18-percent-in-January/20111/123482.vov)

Global natural rubber prices to remain firm

The bullish trend in natural rubber prices could continue at least till April due to the tight supply situation. Until April, a further tightness in supply will be seen due to the seasonal wintering of trees. However, from May until the year-end, supply would be back to normal, provided there are no major calamities. During wintering, production of natural rubber is known to fall.

The NR supply is expected to increase, but at a rate lower than five per cent this year. Even this is on the assumption that the weather will be normal and uprooting of aged trees will be low. Production by the ANRPC countries is expected to increase to a maximum of 9.87 million tonnes (mt), up 4.8 per cent from last year. This is in the event that the annual uprooting of rubber trees is at two per cent of the total area under cultivation.

Due to low re-planting in 2004, only 0.233 million hectares that is equivalent to 3.3 per cent of the yielding area last year, will be available for tapping this year. Moreover, high prices have prompted growers to retain aged trees, postponing replanting in the last two years. Over-aged trees and a further decline in yield may sometimes prompt farmers to uproot the trees in 2011.

In November last year, trees on 16,000 hectares were lost due to heavy winds and floods in Thailand. However, the yielding area expanded as growers tapped dormant trees last year. But the possibility of bringing more areas with dormant trees into production is limited. Rising labour costs and the possibility of changes in prices could prompt growers to keep the trees idle.

The improvement in average yield would be marginal as growers have already exploited their available short-term means on the heels of high prices. The existing yielding area is dominated by trees planted in the 1980s and the productivity of these trees would have dropped drastically on account of ageing.

There could be possible damage to yield potential due to unscientific over-exploitation of trees prompted by high prices. Abnormally high prices have made retaining low-yielding aged trees economically viable. For example, if the price of rubber was US $2 in 2007 and the yield of a 30-year-old tree was 1,100 kg a hectare, a grower would have got $2,200. This year, even if the yield are to drop to 500 tonnes and at around US $5 a kg, the grower would only get a return of $2,500.

Besides this, production in non-traditional regions where productivity potential is lower is also a concern. This is because growers in these regions do not have adequate experience in the required skills and the agro-climatic factors are also not very favourable.

Asian physical NR prices

Asian physical NR prices were high towards the end of the 3rd week of January, 2011 as futures prices on the Shanghai market hit a record high, with supply remaining thin from leading NR producers, according to reports (Table,1).

The rubber price in Thailand, the world's largest exporter, reached a record of 172.80 baht (US$5.65) per kilogram on 20th January. Demand for NR has grown based on rising car sales led by China and India. Supply may also lag behind demand as Thai production, disturbed by heavy rain last year, drops further as growers tend to avoid tapping during the wintering season that begins in February, reducing latex output.

Rubber production in Thailand during the season, which runs until May, normally shrinks by 45 percent to 60 percent from peak production. The low-production period also occurs at the same time in northern Indonesia and Malaysia, lowering output.

According to reports, buyers are still in the market despite high prices to secure the commodity amid increasing supply concerns. Futures also gained amid speculation that buyers in China, the largest consumer, may boost purchases to replenish reserves before the Lunar New Year holiday. The week-long holiday starts from 2nd February.

Natural-rubber inventories in China declined 175 tons to 68,675 tons, based on a survey of 10 warehouses, according to the Shanghai Futures Exchange, which is about 55 percent lower than last year's peak of 151,832 tons.

China's economy expanded 10.3 percent in 2010 to $6.04 trillion, the fastest pace in three years, which compares with 9.2 percent in 2009. China's vehicle sales may grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, according to forecasts by the China Association of Automobile Manufacturers.

The unprecedented upswing in NR prices seen at the Colombo Auctions also, breaking all recent records, should be watched with caution by the producers and consumers alike for contrasting reasons.

(Source: http://print.dailymirror.lk/business/127-local/34202.html)