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)
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