Rubber Rally Seen On Falling Stockpiles

Rubber’s 15 percent slump in about a week may be the prelude to rallies to a record high, driving up the cost of everything from tires to surgical gloves.
Harvests in Thailand, Indonesia and Malaysia, the biggest growers, will fail to meet demand in 2011, leaving stockpiles equal to 69 days of demand, the lowest in more than a decade, Goldman Sachs Group estimates. Prices may advance as much as 32 percent to 605 yen per kilogram ($7,407 per ton) by December.
Bridgestone and Michelin, the world’s largest tire makers, are raising prices up to 15 percent.
While that is bad news for consumers, it means “the best price I’ve ever seen,” said Saneh Panpipat, who tends about 320 hectares of rubber trees in southern Thailand. “My staff and many farmers who were unable to afford their own cars now have new Toyota or Isuzu pickup trucks.”
Heavier than usual rain in Southeast Asia, which supplies 70 percent of the world’s rubber, disrupted harvests in recent months. While farmers will increase supply by 9 percent this year, they will not eliminate shortages as demand advances to its highest level since at least 2000, according to Goldman analysts.
Shortages should mean prices as high as 1,200 yen by the end of the year, said Masayo Kondo, president of Commodity Intelligence. The price finished at 457.6 yen in after-hours trading on Friday and settled at 466.4 yen on Monday. Kondo correctly predicted prices would reach a record in September, when futures markets anticipated gains of no more than 6 percent through this month.
Plantations are in their wintering period, when output can drop up to 60 percent. Trees shed their leaves and reduce latex production from February to May.

(Source: http://www.thejakartaglobe.com/business/rubber-rally-seen-on-falling-stockpiles/425743)

Natural rubber output to fall behind estimates

BEIJING (Commodity Online) : Natural rubber output from the rubber producing nations would lag behind the projected estimates, according to a report from the Association of Natural Rubber Producing Countries.
But high prices are prompting farmers to tap rubber in the off-season, reported Peoples Daily of China.
The output from rubber producing nations is expected to grow by 4.8% to reach 9.77 million tons, down from a projected 8% output which pegged figures at 10 million tons.
Supply from key growers is expected to climb 6% in the first quarter even as demand is surging in China (3.6 million tons), India (991,000 tons) and Malaysia (490,000 tons).
In fact, natural rubber price have been surging across the globe.
Rubber futures in Tokyo have gained 15 % in 2011where as last year the rally added 50 percent to prices. The growth story that is India and China, reflected in their rising car sales have fuelled this price rise.

(Source: http://www.commodityonline.com/news/Natural-rubber-output-to-fall-behind-estimates-36804-3-1.html)

Spot rubber gains

KOTTAYAM, FEB 28:

Rubber prices improved on Monday with sentiments being catalysed by recovery in domestic futuresFresh buying and short covering also lent support.

Sheet rubber improved to Rs 220 (217) a kg according to traders. The grade finished unchanged at Rs 221 (221) a kg both at Kottayam and Kochi as quoted by the Board's official website.

March contracts rebounded to Rs 223.77 (215.17) and April to Rs. 232.93 (223.98) a kg for RSS 4 on the National Multi Commodity Exchange.

Spot rates (Rs/kg) were: RSS-4: 220 (217); RSS-5: 218 (213 ); Ungraded: 215 (211); ISNR 20: 219 (216) and Latex 60%: 142 (142 )

(Source: http://www.thehindubusinessline.com/markets/commodities/article1497895.ece)

IRCo's WEEKLY MARKET SNAPSHOT: 21 - 25 February 2011

IRCo's DCP fell throughout the week and stayed at 560.50 US cents/kg on Friday while rubber futures and cash prices also fallowed suit due to continued long liquidation on rubber futures in the wake of bearish market sentiments and rising crude oil and gold futures.

These circumstances are expected to persist for a short period of time, and market fundaments and supply tightness will outweigh them when the political unrest in the Middle-East and North Africa turn back to normal because global economic indicators in general have not shown any negative signs.

On the top of that multi-billionaire Warren Buffett said in his annual letter to Berkshire Hathaway shareholders on Saturday that he still believes America's best days are ahead and warns Americans, "tomorrow is always uncertain, don't let that reality spook you."

Rising oil prices stoked global stock markets almost throughout the week before the global stock markets would rebound on Friday when oil prices began to stabilize at the end of the week. However, the global stock markets still settled mostly lower on Friday than the previous Friday.

Global forex markets were also influenced by rising crude oil futures during the week that forced investors to move away from the dollar and dollar assets to other safer places and higher returns, i.e. the euro, the Japanese yen, Treasuries, and gold. These also indirectly weakened Indonesian rupiah, Malaysian ringgit, and Thai baht against the greenback on Friday.

(Source: http://www.irco.biz/MarketWise.php?PHPSESSID=ad8313de3e81ba2ae209f2baeb9bac4d)

Liberia Rubber Output Fell 16.5% in 2010, Cocoa Rises

Liberia’s rubber and diamond production declined in 2010 from the year before, while cocoa, coffee and gold output increased, according to the West African nation’s central bank.

Rubber fell 16.5 percent in 2010 to 52,495 metric tons, while diamonds slipped to 25,357 carats from 36,752 carats, the Monrovia-based Central Bank of Liberia said in an e-mailed report today. It blamed ageing trees for the decline in rubber output and poor mining technology on the slowdown of the gems.

Cocoa more than tripled to 17,256 tons, as displaced farmers returned to their villages, according to the e-mailed statement. Liberia neighbors Ivory Coast, the world’s top grower of the chocolate ingredient.

Gold production rose 52 percent to 25,708 ounces last year, while coffee increase to 528 tons from 130 tons in 2009, the bank said.

(Source: http://www.bloomberg.com/news/2011-02-28/liberia-rubber-output-fell-16-5-in-2010-cocoa-rises-1-.html)

Rubber To Rise Amid Increased Demand, Low Supply

Rubber has slumped 15 percent in the last week, but analysts see the slump as a prelude to record highs. Prices may advance by up to 32 percent to 605 yen a kilogram ($7,407 a metric ton) by December, according to the median estimate in a Bloomberg survey. Bridgestone (OTC: BRDCY) and Michelin are responding to raw material price increases by raising their own prices as much as 15 percent.

According to Bloomberg, the expected raw material price increase is due to lower supply yields in Thailand, Indonesia, and Malaysia, where the biggest rubber growers are established. There, the top growers will fail to meet demand for the second year. Goldman Sachs estimates that stockpiles on hand are tantamount to only 69 days of demand, the lowest numbers in more than a decade.

Michelin responded on February 11th by saying that higher material costs would cut about 1.5 billion euro ($2 billion) from its 2011 profits.

Tire companies worldwide have responded to higher raw material costs by passing on larger prices to customers. Michelin is raising tire prices in Europe by up to 7.5 percent, and an average of 8 percent in Japan. Tokyo-based Bridgestone is increasing North America prices by 8 percent on April 1st, and by as much as 15 percent in Japan on June 1st.

Additionally, Japanese tire maker Sumitomo Rubber Industries is boosting prices by up to 10 percent from May. The company forecasts a 58 percent profit tumble from the previous year. Bridgestone said on February 18th that it expects to report a 17 percent profit drop due to higher material costs and as a result of a stronger yen.

The price rise is expected to continue due to increased demand and a continued supply incapable of meeting that demand. In Southeast Asia, heavier-than-usual rain has disrupted harvests. Even as farmers increase supply by 9 percent, Goldman analyst Yuichiro Isayama of Tokyo notes that farmers will not eliminate shortages, as demand picks up to its highest level since 2000.

Bloomberg attributed the recent price decline to the slump across commodities and equity markets due to the conflict in Libya and after the removal of leaders in both Tunisia and Egypt.

Prices for rubber could reach as high as 1,200 yen by year's end, according to Masao Kondo of Tokyo-based Commodity Intelligence. The price gained 0.9 percent, to 470.50 yen, in after-hours trading today. Kondo correctly predicted record prices in September, according to Reuters.

Even if demand weakens, plantations in Thailand, Malaysia, and Indonesia are in a wintering period, with output dropping by up to 60 percent.

Said D.P. Singh, vice president of consumer business Goodyear India, “The entire industry is going through very challenging times . . . Commodity prices are going up across industries but the tire industry is especially hard hit.”

According to Hisaaki Tasaka, a Tokyo-based analyst at brokerage firm ACE Koeki, “Rubber users don't have much raw material stockpiled, so they have no option but to keep buying.”

(Source: http://www.benzinga.com/trading-ideas/long-ideas/11/02/892022/rubber-to-rise-amid-increased-demand-low-supply)

Tokyo rubber futures slump

Tokyo  (march 01, 2011) : tokyo rubber futures tumbled on monday on concerns over demand from china, prompting investors to close positions, but firmer oil prices helped trim losses. the benchmark rubber contract on the tokyo commodity exchange for august delivery fell as much as 14 yen or 2.9 percent in early trade from friday's settlement at 475 yen. as of 0025 gmt, it was at 463.8 yen, down 11.2 yen or 2.4 percent.
the most active shanghai rubber contract for may delivery fell 70 yuan to close at 38,285 yuan ($5,819) per tonne on friday. rubber output is forecast to rise 8 percent to 10.06 million tonnes in 2011 from 9.32 million tonnes last year on expectations of better weather conditions and high prices, the association of natural rubber producing countries said on friday. rubber inventories in warehouses monitored by the shanghai futures exchange fell 1.9 percent last week, the exchange said on friday.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1161547:tokyo-rubber-futures-slump.html?hl=rubber)

Farm dep’t earmarks P50M to boost Basilan rubber output

ZAMBOANGA CITY -- The Department of Agriculture has allocated P50 million this year to boost the rubber industry in Basilan, a conflict-affected island that had pioneered rubber production and processing in the country, the province’s chief executive said.

Basilan Governor Jum J. Akbar, who met with Agriculture Secretary Proceso J. Alcala recently, said in a recent interview that P30 million of the amount will be used to acquire supplies and technologies to set up rubber tree nurseries.

The Agriculture department will shell out P10 million to build rubber processing plants, while the remaining P10 million will be used to rehabilitate roads in the town of Tipo-Tipo that lead to the rubber plantations.

Earlier, rubber cooperatives and processors in Basilan asked the government, particularly state financing institutions, to create a special credit window for the industry to acquire new technology to enable them to produce export-quality rubber.

Enos V. Bucoy, plant manager of the Latuan Agrarian Reform Beneficiaries Association, Inc., said separately that his group has been lobbying for loans from state banks, but stringent requirements have prevented them from borrowing.

He said that, for the past years, rubber cooperatives here have relied on alternative private financing firms, which had less requirements but charged higher interest.

There is a dire need, he said, for the industry to upgrade its processing plants, which date back to the 1960s when American investors were still running the province’s rubber industry.

"Giving us fresh funds would rehabilitate [old equipment] and provide us with new technologies. That way, we can produce higher quality of rubber," he said.

Today, rubber cooperatives here sell their produce to middle men, who then sell to manufacturers of rubber-based products in Luzon.

Rubber is sold here as centrifuged latex, cup lumps, crepe sheets, and crumb form. Most of the rubber produced here ends up as tires, boots and slippers.

"But what we want is that, aside from the existing products, we hope we can produce rubber that can be made into medical paraphernalia, such as surgical gloves, which has higher market value," Mr. Bucoy said.

Mr. Bucoy said only four of the six cooperatives in this province have their own rubber processing plants.

Latest provincial government data show Basilan has at least 15 large rubber-based agrarian reform communities.

These communities account for 7,905 hectares planted with rubber trees.

Basilan’s rubber industry flourished until the start of the Moro revolt in the 1970s, which forced foreign investors to flee the island. It remained largely idle at the height of the Abu Sayyaf threat in the early 2000s.

Bureau of Agricultural Statistics 2008 production data showed Basilan with only 26,000 metric tons (MT) of rubber produced, trailing North Cotabato’s 156,000 MT, Zamboanga Sibugay’s 89,000 MT and Zamboanga del Sur’s 69,000 MT.

Basilan’s rubber hectarage that year totaled 21,000, compared with North Cotabato’s 30,000, and Zamboanga Sibugay’s 28,000.

Zamboanga del Sur, despite beating Basilan in rubber production, had only 6,000 hectares planted to rubber trees in 2008.

(Source: http://www.bworldonline.com/content.php?title=Farm%20dep%E2%80%99t%20earmarks%20P50M%20to%20boost%20Basilan%20rubber%20output&id=27189)

Natural rubber output seen up 4.8pc

SINGAPORE, Feb 28 — Global natural rubber output will rise nearly 5 per cent in 2011, a senior economist of the ANRPC grouping of rubber-producing nations said today, lower than 8 per cent targeted by their governments, as record prices take their toll on yield.

“Farmers have already exploited available short-term means on the heels of abnormally high prices. Therefore, scope for further improvement in yield by short-term means is practically nil,” said Jom Jacob of the Association of Natural Rubber Producing Countries (ANRPC).

“There could be possible damage to yield potential due to unscientific over-exploitation of trees during 2010, prompted by abnormally high prices,” he told Reuters in an interview.

The ANRPC, whose members account for 92 per cent of global production, pegged output at 9.7 million tonnes in 2011, an increase of 4.8 per cent from 2010.

But governments set a more optimistic output target of 10.06 million tonnes in 2011, an increase of 8 per cent, on expectations of better weather conditions and high prices.

Natural rubber is mainly used in tyre-making.

Natural rubber prices are at an all time high above US$6 (RM18.31) a kg after a combination of dry and wet weather disrupted tapping in main producers last year, particularly in Thailand, Indonesia and Malaysia.    ANRPC members include the three Southeast Asia countries as well as Cambodia, China, India, Papua New Guinea, Philippines Singapore, Sri Lanka and Vietnam?

ANRPC also accounts for 92 per cent of global export and 48 per cent of the global consumption of natural rubber.

“The existing yielding area is dominated by trees planted during the 1980s and the yields of those trees would have dropped drastically on account of ageing,” said Jacob.

“An assessment made by the ANRPC points to the supply rising by 4.8 per cent during 2011, 5.2 per cent during 2012, 6.3 per cent during 2013, 7.0 per cent during 2014 and 7.5 per cent during 2015,” he added.     ANRPC also accounts for 92 per cent of global exports and 48 per cent of the global consumption of natural rubber.

High prices have prompted some buyers to withdraw from the physical market, but this move could be temporary.

Natural rubber imports by China, the world’s top consumer, dropped 14 per cent to around 147 million tonnes in January versus a year ago.

“ANRPC observes that dominant buyers have strategically withdrawn for a while. It may be a temporary break,” said Jacob.

“Given? The current growth in automobile and tyre manufacturing industries, and the huge potential available in China and India, one cannot expect?the demand slowdown to continue.”

Car sales in China rose 33.2 per cent in 2010, securing the country’s position as the world’s biggest auto market for a second straight year, official data showed.

A total of 13.8 million sedans, sport utility vehicles and multi-purpose vehicles were shipped to dealers last year, the China Association of Automobile Manufacturers (CAAM) said.

The Singapore-based International Rubber Study Group expects global demand for rubber — both natural and synthetic — to reach 25.5 mln tonnes in 2011, higher than 23.9 million in 2010. — Reuters

(Source: http://www.themalaysianinsider.com/business/article/natural-rubber-output-seen-up-4.8pc/)

NMCE Rubber recovers on short covering

NMCE rubber futures recovered from previous losses on active short covering on Saturday. Futures started the day on lower note on extended selling pressure. However, prices reversed the trend on short covering at lower levels and traded on positive note.
Moreover, gains were limited taking cue from negative closing on TOCOM rubber futures. TOCOM settled at ¥ 457.60 per Kg. on Friday on strong selling pressure.
The rubbers futures are projected to witness volatility today on extended short covering on previous huge losses. However, prices are likely to resume bearish trend afterwards taking cues from down spot market activity.
TOCOM rubber July futures are trading lower at ¥ 470.70 per Kg continuing the losses. Moreover, political tensions in Libya might also weigh on prices. Thus, on cues from above stated factors rubber futures are likely to witness a recovery initially however overall trend will remain weak.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to Passenger Car Association, passenger-car sales increased 16.2 percent Y/Y to 1.53 million last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February 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. Should prices be falling when this scenario develops, the market has a higher probability of a price rise at some point forward.
Japan Futures (TOCOM)
The TOCOM active June contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active June contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.

(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-recovers-on-short-covering-22199.html)

SVR (Standard Vietnamese Rubber) Physical price on Feb 28 2011

F.O.B. SVR (Standard Vietnamese Rubber) Physical price on Feb 28 2011:

(Source: thitruongcaosu.net)

Tokyo Futures Slump On Demand Concerns

Tokyo rubber futures tumbled on Monday (Feb 28) on concerns over demand from China, prompting investors to close positions, but firmer oil prices helped trim losses.
FUNDAMENTALS
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery fell as much as 14 yen or 2.9 percent in early trade from Friday's (Feb 25) settlement at 475 yen. As of 0025 GMT, it was at 463.8 yen, down 11.2 yen or 2.4 percent.
The most active Shanghai rubber contract for May delivery fell 70 yuan to close at 38,285 yuan ($5,819) per tonne on Friday (Feb 25).
Oil extended gains on Monday (Feb 28), with U.S. crude futures rising more than $2 to as high as $99.96 a barrel in electronic trade as worries over the worsening situation in Libya stoked fears of a disruption of oil flows in the region. London crude prices also gained by more than $1 to near $114.
The dollar found a steadier footing early in Asia on Monday (Feb 28) and crawled off a record low versus the Swiss franc as risk appetite made a tentative comeback, but the mood remained cautious given ongoing tensions in Libya and fears of contagion.
(Reuters, February 28, 2011)

Rubber output not as large as growth target

Output of natural rubber from so-called key producing countries is forecast to grow 4.8 percent to 9.77 million metric tons in 2011, the Association of Natural Rubber Producing Countries said in a monthly bulletin. The group's members account for 92 percent of global production.
The forecast was below a growth target by member governments of 8 percent with an estimated output of 10 million tons, assuming favorable weather conditions and a continuation of high prices this year, it said.
Natural-rubber supply from key growers may expand 6 percent in the first quarter as high prices attracted farmers to tap trees during the low-output season, the bulletin said.
Demand for natural rubber in China, India and Malaysia, which accounts for 48 percent of global usage, is expected to increase this year, the bulletin said. Demand in China, the largest user, may gain 9.1 percent to 3.6 million tons; India's usage may gain 5 percent to 991,000 tons and consumption in Malaysia may rise 7 percent to 490,000 tons.
Rubber futures in Tokyo have gained 15 percent this year, extending last year's 50 percent rally, as rising car sales led by China and India boost demand. The price reached an all-time high of 537.7 yen a kilogram on Feb 18.

(Source: http://english.peopledaily.com.cn/90001/90778/90859/7302304.html)

M'sian rubber prices expected to ease this week

KUALA LUMPUR: Malaysian rubber prices are expected to ease on technical correction this week, dealers said.

A dealer said although the market may trade lower, it was still healthy. “Although the current rubber production is tight, traders will adopt a wait-and-see attitude in anticipation of a fall,” he said.

He said the Tokyo rubber futures, which were expected to rebound after prices finished above the key psychological level of 470 yen per kg due to seasonal tight supply in major producing countries, was expected to provide the support.

On a weekly basis, the Malaysian Rubber Board's official physical seller price for tyre-grade SMR 20 fell 102 sen to 1,632 sen per kg from 1,734 sen per kg previously.

Latex in bulk rose 12.5 sen to 1092 sen per kg from 1,079.5 sen per kg the previous Friday.

The unofficial seller closing price for tyre-grade SMR 20 declined 99.5 sen to 1,628 sen per kg from 1,727.5 sen per kg the previous week, while latex in bulk increased 5.5 sen to 1,091.5 sen per kg from 1,086 sen per kg previously.

(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/2/28/business/8148517&sec=business)

Asian rubber: tyre makers chase april cargo; china stays away

Singapore  (february 27, 2011) : tyre makers bought some quantity of indonesian rubber and demand from trading houses in southeast asia also stirred up trading, but main consumer china was on the sidelines although physical prices had dropped from record highs, dealers said on thursday.
indonesian sir20 was traded on thursday at 244 us cents a pound ($5.38 a kg) for may shipment. late on wednesday, sir20 for april delivery changed hands at 245.00 and 246.50 cents a pound ($5.40 and $5.43 a kg), with buyers including japan's largest tyre maker bridgestone. sir20 was traded at all time high of 262 cents last week.
"tyre makers such as bridgestone and goodyear are still looking for rubber but china is so quiet. sometimes you just can't rely on them," said a dealer in indonesia's main growing island of sumatra. tyre grade prices slipped from all time high after tokyo rubber futures, which set the tone for physical prices, dropped on concerns over demand from china after the lunar new year celebration.
dealers said tyre makers in china turned to domestic supply, which was sold at discount to tyre grade in southeast asia, but purchases from other consumers were still steady.
malaysia smr20 grade was sold at $5.54 a kg for april, but there were no reports of deals for thai rss3, which was offered at $6.36 a kg on thursday. "i guess china is waiting for the price to fall further. they are usually very quiet whenever the market tumbles," said a dealer in singapore.
tokyo rubber fell 1.7 percent on thursday as investors booked profits from recent record highs, while shanghai futures dropped nearly 3 percent, but tight supply because of the seasonal dry season in producing countries and strong oil prices offered support.
"at the lower price levels for rubber, routine buying activity is again seen from tyre majors in singapore for april and may loadings," said another dealer in singapore. "noticeably, march rubber is not freely available. volumes in the chinese and japanese rubber markets indicate that both profit-taking and position-rolling have featured heavily."
weekahead dealers expected buyers to buy on dips next week, although gains in tokyo futures were likely to lift prices again because of soaring oil prices. "i think nearby shipment is fully committed, and we can only offer shipment for april, may and june," said a dealer in singapore. "i think demand from china is slow because of high inventory of tyres there. they seem to be having difficulties in selling them. that's why they are reluctant to buy at this point of time." brent oil surged over 7.5 percent to its highest since august 2008 on concern the unrest that has cut more than a quarter of opec-member libya's crude output could spread to other major producers, including top exporter saudi arabia.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1160762:asian-rubber-tyre-makers-chase-april-cargo-china-stays-away.html?hl=rubber)

The highest rubber price will changce the economy and incomes of farmers

More than 48,000 households among smallholders in the country managed to change their economic status by increasing the income of RM1, 300 to RM3, 500 rubber prices rising higher than RM9 per kg in the current market.
Director, The Rubber Industry Smallholders Development Authority (Risda) Kelantan, Zahari Mat Amin said, the total monthly income is based on sales results for each hectare of rubber plantation run by them.
He said the surge of positive developments in the economy and incomes of smallholders who previously lived in poverty are at, be grateful for the financial management practices are planned for future use.
"The increase in the price of rubber is an overflow of the things which were not extravagant demands of small farmers and plan the future of their families.
"The highest price that has never happened before that once made them out of the group of poor farmers or poor," he told reporters after a meeting with the community of small farmers here today.
He said earlier smallholders only earn between RM300 and RM400 that shows the high jump as compared to net income earned in recent years.
According to him, changes in living standards that occurred suddenly no longer give trouble to their families to make ends meet and pay their children's school.
"In fact, their income is now enabling many smallholders have a new car pendpatan better than working in the private and public sectors. In fact, people who take wage cuts of latex also earn a lucrative than ever.
"I advise growers who have a lot of income to keep part of the income that the savings created by the government such as Amanah Saham Bumiputera (ASB) in their future when faced with difficult times," he said.
Zahari however, criticized the attitude of some small farmers are being greed for rubber latex in large quantities to perform incision twice a day, morning and evening on the same trees.
He said such methods are not recommended in rubber production technology because it can shorten the life of the rubber tree can be harvested should be the result of 15 years.
"If done in a continuous manner rubber growers might only be able to get a supply of latex for a period of 10 to 12 years. It will be detrimental to their own and should follow the method recommended by the Risda," he said.
He said a recent analysis conducted found that rubber growers Kelantan Risda only able to score a total of 100 working days per year and the season of spring rains caused a cause they do not fall can work in their respective fields.

(Source: http://www.allvoices.com/contributed-news/8313022-the-highest-rubber-price-will-changce-the-economy-and-incomes-of-farmers)

India Rubber Board unveils major branding initiative

KOCHI (Commodity Online) : In a major branding exercise, the first-of-its-kind initiative, India’s Rubber Board has unveiled a quality certification logo for natural rubber that is expected to increase the acceptability of Indian Natural Rubber in the world market. The country is the fourth largest producer of natural rubber.
Using the quality certification logo of the Rubber Board would increase the acceptability of Indian Natural Rubber (NR) in the world market, observed Sheela Thomas, Chairman of India’s Rubber Board, the official agency entrusted with natural rubber promotion and cultivation.
The prevailing market situation, in which the international rubber prices are ruling much above the domestic prices, is conducive for export, which in turn may help Indian growers to realise international price, she added while distributing the Indian NR brand certificates to the first batch of exporters, exporting with the logo.
The certification will entitle the exporters to use the logo designed by the Board on their consignment. Branding is expected to establish Indian NR as a quality product and help it fetch a premium price, which will benefit not only the exporters, but the producers as well.
The use of logo is permitted for the export consignments conforming to the quality specifications as defined in the Green Book and by the Bureau of Indian Standards. The branding is for the shipment of R.S.S. (Ribbed Smoked Sheet), I.S.N.R. (Indian Standard Natural Rubber) and concentrated latex grades. The holographic logo stickers for sealing the export consignments are developed by C-DIT (Centre for Development of Imaging Technology).
The certificates were awarded to Pala Marketing Co-operative Society (exporting sheet rubber to Turkey), Hevea Crumb Rubber Factory and Ashok Trade Links (both exporting block rubber to Pakistan).
A good response for branding is observed from the NR exporters and more than 500 metric tons of branded rubber is expected to be shipped during the next week.

(Source: http://www.commodityonline.com/news/India-Rubber-Board-unveils-major-branding-initiative-36779-3-1.html)

Quality logo for export rubber will fetch better prices: Rubber Board

The prevailing market situation, in which the international rubber prices are ruling much above the domestic prices, is conducive to export, which in turn may help Indian growers to realise international price, said Sheela Thomas, chairman, Rubber Board.

She observed that using the quality certification logo of the Rubber Board would increase the acceptability of Indian natural rubber (NR) in the world market. She was distributing the Indian NR brand certificates to the first batch of exporters, exporting with the logo.

The certification will entitle the exporters to use the logo designed by the Board on their consignment. Branding is expected to establish Indian NR as a quality product and help it fetch a premium price, which will benefit not only the exporters but the producers as well. Such a branding of NR for export is the first of its kind to be implemented in any rubber producing country.

The use of logo is permitted for the export consignments conforming to the quality specifications as defined in the Green Book and by the Bureau of Indian Standards.

The branding is for the shipment of RSS (Ribbed Smoked Sheet), ISNR (Indian Standard Natural Rubber) and concentrated latex grades. The holographic logo stickers for sealing the export consignments are developed by C-DIT (Centre for Development of Imaging Technology).

The certificates were awarded to Pala Marketing Cooperative Society (exporting sheet rubber to Turkey), Hevea Crumb Rubber Factory and Ashok Trade Links (both exporting block rubber to Pakistan). A good response for branding is observed from the NR exporters and more than 500 tonnes of branded rubber is expected to be shipped during the next week.

(Source: http://www.business-standard.com/india/news/quality-logo-for-export-rubber-will-fetch-better-prices-rubber-board/426748/)

Rubber Rebounding 32% as Reserve Drop Drives Costs for Michelin

Feb. 28 (Bloomberg) -- Rubber’s 15 percent slump in about a week may be the prelude to rallies to a record high, driving up the cost of everything from Michelin tires to surgical gloves.

Harvests in Thailand, Indonesia and Malaysia, the biggest growers, will fail to meet demand for a second year in 2011, leaving stockpiles equal to 69 days of demand, the lowest in more than a decade, Goldman Sachs Group Inc. estimates. Prices may advance as much as 32 percent to 605 yen a kilogram ($7,407 a metric ton) by December, according to the median estimate in a Bloomberg survey of 10 analysts and traders.

Bridgestone Corp. and Michelin & Cie., the world’s biggest tire makers, are boosting prices by as much as 15 percent, and Top Glove Corp., the largest rubber-glove producer, is charging more. The rally in rubber mirrors the 93 percent advance in the S&P GSCI Agriculture Index since its June low caused by floods from Canada to Australia and droughts in China and Russia.

While that’s bad news for consumers, it means “the best price I’ve ever seen,” said Saneh Panpipat, 54, who tends about 2,000 rai (320 hectares) of rubber trees in southern Thailand, the country’s main growing region. “My staff and many farmers who were unable to afford their own cars now have brand-new Toyota or Isuzu pickup trucks.”

Heavier-than-usual rain in Southeast Asia, which supplies 70 percent of the world’s rubber, disrupted harvests in the past several months. While farmers will increase supply by 9 percent this year, they won’t eliminate shortages, as demand advances to its highest level since at least 2000, according to the team of Goldman analysts, led by Tokyo-based Yuichiro Isayama.

Global Recession

Benchmark futures on the Tokyo Commodity Exchange jumped more than fourfold since reaching a six-year low of 99.8 yen in December 2008 as the global recession curbed demand. That compares with a more-than-doubling in the S&P GSCI Index of commodities and a 58 percent advance in the MSCI World Index of equities. Treasuries returned about 3.7 percent, a Bank of America Merrill Lynch index shows.

Shortages should mean prices as high as 1,200 yen by the end of the year, said Masayo Kondo, president of Tokyo-based Commodity Intelligence Ltd., the most bullish participant in the Bloomberg survey. The price finished at 457.6 yen in after-hours trading on Feb. 25. Kondo correctly predicted prices would reach a record in September, when futures markets were anticipating gains of no more than 6 percent through this month.

Toppled Regimes

The 15 percent decline in rubber prices since reaching a record 535.7 yen on Feb. 18 has reflected the slump across commodities and equity markets amid riots in North Africa and the Middle East and the toppling of autocratic leaders in Egypt and Tunisia. Crude oil traded in New York reached $100 a barrel for the first time in more than two years on Feb. 23 as the MSCI World Index had its biggest weekly rout since November.

“Commodities used for industrial production including base metals and rubber may be vulnerable” if crude keeps rising, said Tomomichi Akuta, an analyst at Mitsubishi UFJ Research & Consulting Co. in Tokyo.

Oil above $120 for a sustained period would likely cause a “meaningful shortfall in global growth,” Jonathan Garner, Morgan Stanley’s chief Asia and emerging-market strategist, said in a Bloomberg Television interview in Hong Kong on Feb. 23.

Higher energy costs and record food prices are already driving up inflation. The U.K. consumer-price index, which includes tires and condoms, increased an annual 4 percent in January, twice the Bank of England’s target.

Record Food Prices

The U.S. consumer-price index gained a greater-than- forecast 0.4 percent in the same month, led by higher prices for food and fuel. Inflation will accelerate toward 2 percent over the next year, the top of the central bank’s target, Federal Reserve Bank of Philadelphia President Charles Plosser said in a speech in Alabama on Feb. 23.

Euro-region inflation accelerated to 2.4 percent last month, from 2.2 percent in December. European Central Bank council member Yves Mersch said officials may toughen their language on inflation, indicating policy makers are growing closer to raising interest rates.

The global economy can withstand higher oil prices for a short period, John Lipsky, first deputy managing director of the International Monetary Fund, said in an interview with Bloomberg Television on Feb. 22.

Rubber supplies will drop in the next few weeks, even if demand weakens. Plantations in Thailand, Indonesia and Malaysia are in their so-called wintering period, when output can drop by as much as 60 percent, according to the Kuala Lumpur, Malaysia- based Association of Natural Rubber Producing Countries. Trees shed their leaves and reduce latex production during the months from February to May.

Global Sales

For now, demand isn’t expected to slow. Global sales of light vehicles will advance 7.9 percent to a record 75.5 million this year, according to Ashvin Chotai, the London-based managing director of Intelligence Automotive Asia Ltd.

Passenger-car sales in China, the world’s biggest auto market, will grow about 10 percent to 15 percent this year, according to the China Association of Automobile Manufacturers. Total vehicle sales jumped 32 percent to 18.06 million last year. China’s economy will expand 9.5 percent this year, almost three times the rate of the U.S., according to the median of as many as 67 economist estimates compiled by Bloomberg.

The jump bolsters demand for tires, whose manufacturers use about 60 percent of the world’s rubber, according to the Singapore-based International Rubber Study Group. Surging commodity prices are also increasing their costs.

Michelin Tires

Michelin, the world’s second-largest tiremaker, said on Feb. 11 that higher raw-material costs would cut about 1.5 billion euros ($2 billion) from profit this year. The company, based in Clermont Ferrand, France, is raising some tire prices in Europe by as much as 7.5 percent and by an average 8 percent in Japan in May. Its shares rose 9.1 percent in Paris trading this year.

“We will have and we’ll show it again, a very firm and responsive pricing policy,” Jean-Dominique Senard, non-general managing partner at Michelin, told investors on a conference call Feb. 11. “We have increased quite significantly our price in the world everywhere in every segment.”

Global rubber production capacity should increase by almost 40 percent over the next decade and there is an “exuberance” in markets driven by the liquidity from government spending to encourage economic growth, Senard said.

Bridgestone, the world’s largest tiremaker, said Feb. 18 it expects to report a 17 percent drop in profit this year as higher material costs and a stronger yen erode earnings. The Tokyo-based company said this month it will increase prices in North America by as much as 8 percent on April 1, and by as much as 15 percent in Japan from June 1. Its shares rose 4.9 percent in Tokyo trading this year.

Consumer Business

“The entire industry is going through very challenging times,” D.P. Singh, vice president of consumer business at Goodyear India Ltd., a unit of Goodyear Tire & Rubber Co., said in Mumbai on Feb. 22. “Commodity prices are going up across industries but the tire industry is especially hard-hit.”

Sumitomo Rubber Industries Ltd., Japan’s second-largest tire maker, said it will boost prices by as much as 10 percent from May. The company forecast Feb. 14 that profit this year will tumble 58 percent from a year earlier.

Top Glove, based in Klang, Malaysia, has been raising prices since rubber started climbing about a year ago, Executive Director Lim Cheong Guan said. The company said in January it would spend about $52 million planting rubber trees in Cambodia to help counter the jump in latex costs.

“Rubber users don’t have much raw material stockpiled, so they have no option but to keep buying,” said Hisaaki Tasaka, a Tokyo-based analyst at brokers ACE Koeki Co.

(Source: http://www.businessweek.com/news/2011-02-27/rubber-rebounding-32-as-reserve-drop-drives-costs-for-michelin.html)

Delay in rubber payments affect 4,000 Tenom families

Tenom: More than 4,000 families here are facing difficulties due to the delay in payments from the Sabah Rubber Industry Board (SRIB).

Apart from getting payments only in one or two months' time, the rubber tappers also had to sell their rubber produce at a lower price, between RM7 and RM7.40, to the private rubber collecting agents, instead of the RM9 per kilo from the Government.

Umno Tenom vice chief, Esar Andamas, urged the Government to take serious note on the matter, particularly the price of rubber bought by the private agents from the rubber tappers.

He cautioned that if the issue was not resolved, it might affect the Barisan Nasional's (BN) chances in the next general election.

He also hoped the Malaysia Anti-Corruption Commission would look into the price structure of the private rubber collecting agents.

(Source: http://www.dailyexpress.com.my/news.cfm?NewsID=77173)

Ludwig: Pricing is right at Goodyear

Tire industry analyst Saul Ludwig maintains his "BUY" stock rating on Goodyear Tire & Rubber Co. He describes the company's handling of rising raw material costs as "masterful."

Ludwig, a managing director at Northcoast Research Holdings LLC, is one of a number of analysts to reduce his previously announced earnings per share (EPS) estimate for this year.

"Many Goodyear followers have cut estimates for Goodyear for 2011 to what we believe are too low levels," he says. "We are more optimistic based on our detailed review of what is known and Goodyear’s history of muting the impact of rising raw material costs.

"As such, we maintain our positive view on Goodyear for 2011 and 2012 while still recognizing some longer term concerns."

Goodyear will largely complete its planned exit of 25 million units of high cost capacity this year, he says. (See "Analyst Saul Ludwig comments on plant closure.")

"With the exception of the uncertainties related to its price/cost spread, most other variables are pointing in a positive direction this year. Cost reduction projects should save at least $250 million, unabsorbed overhead should be better by at least $175 million and volume growth should add over $100 million. Those will be offset with inflation, planned increases in SG&A and new plant start up costs in China.

The profit impact from higher truck tire sales also would be a positivie.

"With truck tire demand surging ahead globally coupled with modest growth in consumer tires, Goodyear will be able to run its plants at a high level, thus meaningfully lowering its unabsorbed overhead," he adds.

Goodyear posted a net loss of $216 million on net sales of $18.8 billion for fiscal 2010 (see "Goodyear announces financial results, plans to close plant").

(Source: http://www.moderntiredealer.com/News/Story/2011/02/Ludwig-Pricing-is-right-at-Goodyear.aspx)

RUBBER GLOVE FACTORY RAZED, THREE WORKERS INJURED

KLANG, Feb 26 (Bernama) -- A rubber glove factory at Batu Belah, Meru here, was destroyed in a fire here today which also injured three of the factory workers who were staying in a hostel in the compound.

North Klang district police chief Superintendent Mohamad Shukor Sulong said five fire engines, from the stations in North Klang, South Klang, Andalas, Port Klang and Shah Alam, were at the scene to douse the flame in the incident which occurred about 7am.

He said the cause of the fire had yet to be ascertained as firemen were still at the scene to douse the flame as at 4pm.

"So far, we have been informed that three people are injured and they have been sent to Tengku Ampuan Rahimah Hospital for treatment," he said when contacted here.

The smoke from the factory fire could be seen as far as four kilometres away.

One of the factory workers, Salman, 38, from Bangladesh, said he and his friends were preparing to go to work when they heard an explosion.

-- BERNAMA

(Source: http://malaysia.news.yahoo.com/bnm/20110226/tts-factory-fire-bm-with-pix-993ba14.html)

Rubber Production to Gain 4.8% in 2011, Association Says

Output of natural rubber from so- called key producing countries is forecast to grow 4.8 percent to 9.77 million metric tons in 2011, the Association of Natural Rubber Producing Countries said in a monthly bulletin. The group’s members account for 92 percent of global production.

The forecast was below a growth target by member governments of 8 percent with an estimated output of 10 million tons, assuming favorable weather conditions and a continuation of high prices this year, it said.

Natural-rubber supply from key growers may expand 6 percent in the first quarter as high prices attracted farmers to tap trees during the low-output season, the bulletin said.

Demand for natural rubber in China, India and Malaysia, which account for 48 percent of global usage, is expected to increase this year, the bulletin said. Demand in China, the largest user, may gain 9.1 percent to 3.6 million tons; India’s usage may gain 5 percent to 991,000 tons and consumption in Malaysia may rise 7 percent to 490,000 tons.

Rubber futures in Tokyo have gained 15 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India boost demand. The price reached an all-time high of 537.7 yen per kilogram on Feb. 18.

(Source: http://www.bloomberg.com/news/2011-02-25/rubber-production-to-gain-8-in-2011-association-predicts-1-.html)

Environment conducive for natural rubber export

NEW DELHI, FEB 26:

With international natural rubber (NR) prices ruling over the domestic prices, the Rubber Board on Saturday said the environment is conducive for export.

“The prevailing market situation, in which the international rubber prices are ruling much above the domestic prices, is conducive to export, which in turn may help Indian growers to realise international price,” Rubber Board Chairman, Mr Sheela Thomas, said in a statement on the board’s website.

Thomas, while distributing the Indian NR brand certificates to the first batch of exporters shipping the produce with the logo, observed that using the quality certification logo of the board would increase the acceptability of Indian NR in the world market.

The certification will entitle the exporters to use the logo designed by the board on their consignment. Branding is expected to establish Indian NR as a quality product and help it fetch a better price.

The use of logo is permitted for the export consignments conforming to the quality specifications as defined in the Green Book and by the Bureau of Indian Standards, the board said.

The holographic logo stickers for sealing the export consignments are developed by C—DIT (Centre for Development of Imaging Technology), it added.

A good response for branding is observed from the NR exporters and more than 500 tonnes of branded rubber is expected to be shipped during the next week, the statement said.

(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1492339.ece)

China, South Korea dumping tyres in Indian markets: ATMA

MUMBAI (Commodity Online) : Automotive Tyre Manufacturers Association (ATMA) of India has pointed out dumping of tyres in the Indian market by China and South Korea.
It is estimated that Chinese and South Korean rubber imports account for 70% of India’s tyre imports with various bilateral agreements nullifying the import duty of 10% and coming over with a basic customs duty tag of 8.6%, reported Financial Express.
With respect to imports of truck and bus tyres for 2009-10, the rate of imports has gone up by 35% for 2010-11, when calculated on annualized basis. Import of passenger car tyres has gone up by 40% for the same period.
Also, the industry has asked for duty-free imports of 2 lakh tons of natural rubber which is a projected deficit for 2011-12. As the Union Budget approaches, the association has also demanded duty-free imports of almost all raw materials like butyl rubber, styrene butadiene rubber (SBR), ethylene propylene non-conjugated diene rubber (EPDM), PBR, steel tyre cord, polyester tyre cord, nylon tyre cord and rubber chemicals.
In fact, cost of raw material is responsible for 70% of the production cost and about 62% of tyre industry turnover.

(Source: http://www.commodityonline.com/news/China-South-Korea-dumping-tyres-in-Indian-markets-ATMA-36761-3-1.html)

Rubber Futures to return to high levels : Commerzbank

TOKYO (Commodity Online) : Rubber futures prices are all set to return to highest levels soon and does not herald a correction on high demand by Chinese and Indian car makers, according to Commerzbank analysts.
Commerzbank analysts forecast rubber prices will "likely remain at a high level", noting that 2011 looked set to be the fourth year in the last five in which demand for the tyre ingredient will exceed production.
The fall in rubber futures also appeared to contradict usual market logic in which prices move in line with oil, the raw material for synthetic alternatives.
However, high oil prices, which for Brent crude topped $117 a barrel on Middle East unrest, could also dent the demand for cars which has driven rubber's rally of more than 60% over the last six months.
Indeed, Commerzbank's assessment was based on estimates from the International Rubber Study Group that demand will rise by 4.6% to 11.2m tonnes this year, as demand for vehicles soars among Asia's enriched consumers.
Chinese carmakers expect sales growth of 10-15% in domestic sales this year, with Indian peers forecasting a 23% rise their production.
Rubber consumption in these countries will grow by 9% and 5.2% respectively, the Association of Natural Rubber Producing Countries believes.
Meanwhile, the association believes that output among its members, which account for the great majority of world production, will rise by 4.8% to a little less than 10m tonnes, held back by heavy rains brought by the La Nina weather pattern.
The supply squeeze is being exacerbated at the moment by the entry of Thailand, the top producer, into a seasonal downturn, which last under April, when rubber trees shed their leaves and latex volumes fall to half peak levels.

(Source: http://www.commodityonline.com/news/Rubber-Futures-to-return-to-high-levels--Commerzbank-36772-3-1.html)

India Rubber Board unveils major branding initiative

KOCHI (Commodity Online) : In a major branding exercise, the first-of-its-kind initiative, India’s Rubber Board has unveiled a quality certification logo for natural rubber that is expected to increase the acceptability of Indian Natural Rubber in the world market. The country is the fourth largest producer of natural rubber.
Using the quality certification logo of the Rubber Board would increase the acceptability of Indian Natural Rubber (NR) in the world market, observed Sheela Thomas, Chairman of India’s Rubber Board, the official agency entrusted with natural rubber promotion and cultivation.
The prevailing market situation, in which the international rubber prices are ruling much above the domestic prices, is conducive for export, which in turn may help Indian growers to realise international price, she added while distributing the Indian NR brand certificates to the first batch of exporters, exporting with the logo.
The certification will entitle the exporters to use the logo designed by the Board on their consignment. Branding is expected to establish Indian NR as a quality product and help it fetch a premium price, which will benefit not only the exporters, but the producers as well.
The use of logo is permitted for the export consignments conforming to the quality specifications as defined in the Green Book and by the Bureau of Indian Standards. The branding is for the shipment of R.S.S. (Ribbed Smoked Sheet), I.S.N.R. (Indian Standard Natural Rubber) and concentrated latex grades. The holographic logo stickers for sealing the export consignments are developed by C-DIT (Centre for Development of Imaging Technology).
The certificates were awarded to Pala Marketing Co-operative Society (exporting sheet rubber to Turkey), Hevea Crumb Rubber Factory and Ashok Trade Links (both exporting block rubber to Pakistan).
A good response for branding is observed from the NR exporters and more than 500 metric tons of branded rubber is expected to be shipped during the next week.

(Source: http://www.commodityonline.com/news/India-Rubber-Board-unveils-major-branding-initiative-36779-3-1.html)

Rubber prices to see technical correction

Malaysian rubber prices are expected to ease on technical correction next week, dealers said.
A dealer said although the market may trade lower, it was still healthy.
"Although the current rubber production is tight, traders will adopt a wait-and-see attitude in anticipation of a fall," he said.
He said the Tokyo rubber futures, which were expected to rebound after prices finished above the key psychological level of 470 yen per kg due to seasonal tight supply in major producing countries, was expected to provide the support.

On a weekly basis, the Malaysian Rubber Board's official physical seller price for tyre-grade SMR 20 fell 102 sen to 1,632 sen per kg from 1,734 sen per kg previously.
Latex in bulk rose 12.5 sen to 1092 sen per kg from 1,079.5 sen per kg last Friday.
The unofficial seller closing price for tyre-grade SMR 20 declined 99.5 sen to 1,628 sen per kg from 1,727.5 sen per kg last week, while latex in bulk increased 5.5 sen to 1,091.5 sen per kg from 1,086 sen per kg previously
(Source: http://www.btimes.com.my/articles/20110226114210/Article/)

Good times for rubber industry

Sri Lankan rubber recorded a highest price of Rs 730 per kilo for RSS grade 3 rubber. This was the highest price reached in this grade in the history of Sri Lankan rubber.

“This was the highest ever price recorded for rubber at the Colombo auctions held last week,” a Plantation Industries Ministry spokesman said.

Year 2011 so far has been the best year for traders with rubber being auctioned at high prices from January. ”Sheet rubber of both high and lower grades were also sold at comparatively higher prices,” he said. The Rubber market seems to be gaining momentum with rising demand with big buyers’ participation and short supply in the world market.

He said that the Government provides fertilizer and high quality rubber saplings to promote the rubber industry. Rubber smallholders contribute 70 percent of the country’s rubber production. “We want sustain them in the industry”.

So, the higher prices of rubber have encouraged many smallholders to increase production,” he said. The rubber industry also remains a major sector in the economy in terms of contribution to the Gross Domestic Product (GDP), export earnings, employment and income, involving large numbers of smallholders.

(Source: http://www.dailynews.lk/2011/02/26/news10.asp)

Cooper Tire 4Q profit edges up on rising demand

FINDLAY, Ohio (AP) — Cooper Tire & Rubber Co. said Friday its fourth-quarter profit rose 2.6 percent as stronger demand for its products helped offset rapidly rising raw materials costs. The company is also raising tire prices next month for the second time this year and plans to boost production.

Citing high raw materials costs, Cooper Tire plans an average U.S. price increase of 8 to 9 percent depending on product, effective March 15. This is on top of a 2.5 percent increase on Feb. 1 for most light vehicle products.

Its shares rose 16 cents to $23.02 in morning trading.

The Findlay, Ohio, company reported net income rose to $40.2 million, or 64 cents per share, compared with $39.2 million, or 63 cents per share, in the same period of 2009.

Analysts polled by FactSet expected higher earnings of 67 cents per share.

Revenue rose 19 percent to $919.6 million from $773.1 million. Analysts expected revenue of $850.5 million.

The fourth-quarter results included $1 million in restructuring charges mainly for closing a factory in Albany, Ga. The company reported $12 million in restructuring costs in the fourth quarter of 2009, it said in a statement.

The company said higher raw materials costs for the quarter were partially offset by better pricing and increased sales volume.

"We were able to deliver positive results during the fourth quarter despite the beginnings of rapid increases in raw material costs, particularly natural rubber," CEO Roy Armes said in a statement. "Demand for our products continued to be very strong and we were able to run the manufacturing facilities efficiently to deliver improved manufacturing results."

The price of natural rubber, which is used in combination with synthetic rubber to make tires, rose more than 75 percent in the past four months, the company said. Overall, raw materials costs rose in price 15 to 20 percent from the fourth quarter to the first quarter of this year, but the rate of increase should slow during the second quarter, the company said.

The company plans to raise production 10 percent this year to meet stronger demand for its products, Armes said.

For the full year, Cooper Tire reported net income of $140.5 million, or $2.24 per share, more than double the $51.8 million, or $1.02 per share, in 2009. Revenue rose 21 percent to a record $3.36 billion from $2.78 billion in 2009.

(Source: http://www.bloomberg.com/news/2011-02-25/cooper-tire-4q-profit-edges-up-on-rising-demand.html)

Natural rubber import to increase, exports to decline: Survey

The Economic Survey today said the export of natural rubber (NR) could be lower and its imports could rise in 2010-11 on back of increase in consumption.

"India has emerged as the second largest consumer of NR, overtaking the United States with a share of 9.6% in world consumption in 2009," the survey tabled in Parliament by Finance Minister Pranab Mukherjee said.

The report said consumption of NR in 2010-11 is projected to increase by 1.9% to 9,48,000 tonne.

The consumption of NR in the year-ago period was 930,565 tonne.

"Despite not having the best geographically favourable regions for growing NR, India continued to record the highest productivity among major NR producing countries," the survey said commending India's potential as a NR producer.

India is the fourth largest producer of NR with a share of 8.5% in worlds production in 2009, it added.

"The production of NR in 2010-11 is projected at 8,51,000 tonne, which is an increase of 2.4% over 2009-10," the report said. India produced 8,31,400 tonne of NR in the previous financial year.

The exports of NR in the period April 10-January 11 declined by almost 14% to 11,678 tonne as against 13,499 tonne in the year-ago period.

The imports registered an increase in the April 10-January 11 period by almost 8% to 1,64,330 tonne as against 1,52,510 tonne in the corresponding period of previous year.

(Source: http://www.business-standard.com/india/news/natural-rubber-import-to-increase-exports-to-decline-survey/127068/on)

India Rubber Board unveils major branding initiative

KOCHI (Commodity Online) : In a major branding exercise, the first-of-its-kind initiative, India’s Rubber Board has unveiled a quality certification logo for natural rubber that is expected to increase the acceptability of Indian Natural Rubber in the world market. The country is the fourth largest producer of natural rubber.
Using the quality certification logo of the Rubber Board would increase the acceptability of Indian Natural Rubber (NR) in the world market, observed Sheela Thomas, Chairman of India’s Rubber Board, the official agency entrusted with natural rubber promotion and cultivation.
The prevailing market situation, in which the international rubber prices are ruling much above the domestic prices, is conducive for export, which in turn may help Indian growers to realise international price, she added while distributing the Indian NR brand certificates to the first batch of exporters, exporting with the logo.
The certification will entitle the exporters to use the logo designed by the Board on their consignment. Branding is expected to establish Indian NR as a quality product and help it fetch a premium price, which will benefit not only the exporters, but the producers as well.
The use of logo is permitted for the export consignments conforming to the quality specifications as defined in the Green Book and by the Bureau of Indian Standards. The branding is for the shipment of R.S.S. (Ribbed Smoked Sheet), I.S.N.R. (Indian Standard Natural Rubber) and concentrated latex grades. The holographic logo stickers for sealing the export consignments are developed by C-DIT (Centre for Development of Imaging Technology).
The certificates were awarded to Pala Marketing Co-operative Society (exporting sheet rubber to Turkey), Hevea Crumb Rubber Factory and Ashok Trade Links (both exporting block rubber to Pakistan).
A good response for branding is observed from the NR exporters and more than 500 metric tons of branded rubber is expected to be shipped during the next week.

(Source: http://www.commodityonline.com/news/India-Rubber-Board-unveils-major-branding-initiative-36779-3-1.html)

Rubber Production to Gain 8% in 2011, Association Predicts

Output of natural rubber from so- called key producing countries is forecast to grow 8 percent to 10 million metric tons in 2011, the Association of Natural Rubber Producing Countries said in a monthly bulletin. The group’s members account for 92 percent of global production.

Natural-rubber supply from key growers may expand 6 percent in the first quarter as high prices attracted farmers to tap trees during the low-output season, the bulletin said.

Demand for natural rubber in China, India and Malaysia, which account for 48 percent of global usage, is expected to increase this year, the bulletin said. Demand in China, the largest user, may gain 9.1 percent to 3.6 million tons; India’s usage may gain 5 percent to 991,000 tons and consumption in Malaysia may rise 7 percent to 490,000 tons.

Rubber futures in Tokyo have gained 15 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India boost demand. The price reached an all-time high of 537.7 yen per kilogram on Feb. 18.

(Source: http://www.bloomberg.com/news/2011-02-25/rubber-production-to-gain-8-in-2011-association-predicts-1-.html)

NMCE Rubber fall to continue

AHMEDABAD (Commodity Online): Rubber is in primary uptrend but it has made triple top on its daily chart near 24790 and today Rubber has broken its strong support of 22200 at NMCE, the bourse where Rubber is a major commodity to reckon with.
Rubber opened 21900 and after making high of 22999 it is currently trading near 22000. Rubber looks weak and prices are expected to correct which has support around 20680.
“Technically, Intraday traders can sell rubber below 21700 with the stop loss of 21950,” said Bharti Navlani, Technical analyst with Commodity Online.

(Source: http://www.commodityonline.com/marketmovers/NMCE-Rubber-fall-to-continue-2011-02-25-3140-3-1.html)

Thai rubber exports in 2011 seen to double in value on soaring world price: Official

POTENTIAL OF THAI NORTHEASTERN REGION
Rubber plantations, traditionally seen only in the south of Thailand, have in recent years sprung up in the northeastern region of the country.
And Luckchai, whose Thai Xua started planting rubber trees in the northeast in 1995, saw a high potential of this region, the driest and poorest of the country.
He said 41,600 square kilometers of land in the northeast could be used for planting rubber trees, while currently only less than 11.5 percent, or 4,800 square kilometers, are of rubber plantations.
He believed that because of the attractive price, more farmers in the northeast would turn to plant rubber trees.
"I'm confident that the northeast has a high potential," the president of the Thai Rubber Association said. "Perhaps in the next 20-30 years, this region could become a bigger producer than the south."

Demand of rubber surged in particular from its usage to produce auto tires in China, which consumes 27 percent of world's demand.
Luckchai, whose Thai Hua trades rubber with China, said the Chinese consumption rose to three million tons in 2010, the world' s largest now, from about 1.1 million tons in 2001.
Global demand of natural rubber in 2011 is estimated at 11 million tons.
Luckchai said China superseded the United States as the world's largest rubber consumer in 2001, when its demand exceeded one million tons while that of the U.S. dropped below that mark.
"If Chinese demand continues to grow by leaps and bounds like this, the production will remain insufficient," he said.
And the world's production -- 70 percent of which comes from the big three producers, which are Thailand, Indonesia and Malaysia -- is under even higher pressure from the surging economy of India.
"If the Indian economy continues to grow like the Chinese, or just half of its pace, the production will become even more inadequate," Luckchai said.

(Source: http://english.peopledaily.com.cn/90001/90778/90858/90863/7300801.html)

NMCE Rubber tumbles on short selling

NMCE rubber futures extended the bearish trend on strong selling interest for 5th consecutive session on Thursday. On opening itself prices traded down on heavy selling pressure. TOCOM rubber futures also traded down settled on negative note at ¥ 473 per Kg. on strong selling pressure.
Rising economic tension in Middle East further added to the down side. Domestic spot market further fell by `300 per quintal. Thus, on cues from domestic and international market NMCE rubber futures ended on negative note.
The rubbers futures are projected to witness volatility today on overall bearish sentiments prevailing market. However, prices are likely to show small recovery today on short covering.
TOCOM rubber July futures are trading slightly lower at ¥ 477.90 per Kg. Moreover, Middle East concern are now easing down which may support the prices to give a pull back. Thus, on cues from above stated factors rubber futures are likely to witness a recovery today however overall trend will remain weak.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
According to the Rubber Research Institute of Thailand, the physical price of Thai rubber dropped 0.9 percent to 195.80 baht ($6.42) a kilogram yesterday
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to Passenger Car Association, passenger-car sales increased 16.2 percent Y/Y to 1.53 million last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Japan Futures (TOCOM)
The TOCOM active June contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active June contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and bearish conditions.

(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-tumbles-on-short-selling-22189.html)

CII advocates for investment in rubber sector of Tripura

Agartala, Feb 25 : Confederation of Indian Industry (CII) strongly advocated for investment in Tripura rubber sector considering the strategic location of the state with upcoming linkage with Chittagong port of Bangladesh, which would make the state as gateway to South East Asia market.

Speaking at the Tripura Rubber Convention here today, Senior Director and Head of Development Initiatives, CII, Indrani Kar said that the business opportunities for setting up rubber processing units in Tripura had bright future because of recent bilateral agreements between India and other neighbouring countries.
''The convention focused on making rubber industry a catalyst in improving the socio-economic set up of the down-trodden grower and business communities that enabling investors to consider Tripura as an important destination and access to intermediary and cost effective processing technologies,'' Ms Kar underlined.
In view of the area under plantation together with the growth positional and rubber production trend, Tripura had become as second rubber capital of the country and the development of Rubber Park near Agartala had also boost the value addition of natural rubber at highest degree, Mr Kar pointed out.
She, however, asserted that CII was already in the process to tap export market of Bangladesh, Myanmar and other South Asian countries for Tripura rubber and there were ample opportunities of foreign investment in rubber sector, as Tripura has various subsidies on investment including cent percent excise duty exemption.

(Source: http://www.newkerala.com/news/world/fullnews-155346.html)

SVR Physical price on Feb 02 2011

F.O.B. SVR Physical price on Feb 02 2011

(Source: thitruongcaosu.net)

Plan for rubber tree replanting

PUTRAJAYA: The Plantation Industries and Commodities Ministry will propose to the cabinet for the replanting of 40 ha rubber trees per year to meet strong demand.

Its Minister Tan Sri Bernard Dompok said his ministry would also propose 13,000 ha of new plantation annually to increase rubber production.

“We are trying to increase the production of rubber by replanting,” he said after the exchange of agreements between Malaysian Rubber Board (MRB), Felda Rubber Industries Sdn Bhd and Mardec Bhdyesterday.

“We will propose the plans to the cabinet as soon as possible and hopefully get a concrete decision before the end of next month,” said Dompok.

Malaysia currently has 1.2 million ha of rubber plantation, of which 80% is in production.

Dompok said the country now produced less than one million tonnes of rubber a year.

He hopes to double the production to two million tonnes by 2020.

Earlier in his speech, Dompok said Felda Rubber Industries and Mardec have been selected as recipients of technology transfer and commercialisation for two advanced rubber products – ekoprena and pureprena – developed by MRB.

He said the commercialisation would enable both Felda Rubber Industries and Mardec to produce ekoprena and pureprena with an initial capacity of 12,000 tonnes a year and up to a target capacity of 300,000 tonnes annually by 2020.

He said the project was expected to result in gross national income totalling RM1.3bil and create 1,000 jobs by 2020.

Ekoprena is a form of epoxidised natural rubber obtained by the epoxidation of natural rubber latex.

Dompok said ekoprena, an established class of specialty rubber, was regarded as a green material for rubber product-manufacturing industry, particularly in tyre-making sector, as it was produced from a renewable natural source.

Pureprena is a highly purified natural rubber and an eco-efficient form of deproteinised natural rubber with distinguised raw rubber properties for dynamic and engineering applications.

(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/2/25/business/8136015&sec=business)

Tokyo Futures Ease On Profit-Taking Supply Worry Supports

Key Tokyo rubber futures fell on Friday (Feb 25) as investors took profits after recent high prices, but supply concerns continued to provide support.
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery, which debuted on Wednesday (Feb 23), fell 3 yen or 0.6 percent to 475.8 yen per kg as of 0029 GMT.
The contract fell as low as 469.3 yen on Thursday (Feb 24), the lowest since Feb. 2.
The most active Shanghai rubber futures for May delivery closed on Thursday (Feb 24) at 38,355 yuan per tonne, down from Wednesday's (Feb 23) close of 39,530 yuan. The contract hit a record high of 43,500 yuan on Feb. 9.
U.S. crude futures were up on Friday (Feb 25). Brent crude sank from 2-½ year highs near $120 a barrel in strong, late-day profit-taking following an unsubstantiated rumour Muammar Gaddafi had been shot and Saudi Arabia's assurances it can counter Libyan supply disruptions.
The dollar nursed heavy losses early in Asia on Friday (Feb 25), hovering above a record low versus the Swiss franc as investors sought safety in other currencies on fears the unrest in Libya will spread to other oil producers.
(Reuters, February 25, 2011)

Asian Physical Rubber Prices - Feb 25

Asian physical rubber prices were steady near record high levels on Friday on the back of tight supply and firm futures prices on the Tokyo Commodity Exchange, dealers said.

PRICES OF PHYSICAL RUBBER COMPARED TO FEB 24

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, February 25, 2011)

Tyre Companies Appeal For More NR Imports in India

The tyre industry has appealed the finance minister for import of 200,000 tonnes of natural rubber (NR) in 2011-12 in order to bridge the gap between domestic consumption and production in India. In a pre-Budget submission to the finance minister, the Automotive Tyre Manufacturers Association (Atma) has also demanded customs duty waiver on raw materials like butyl rubber and styrene butadiene rubber (SBR), which are not produced domestically.
It has also demanded reduction in customs duty on raw materials where domestic supply is short of demand, like steel tyre cord, rubber chemicals and polyester tyre cord.
At present, butyl rubber attracts a duty of five per cent and other raw materials which are not produced in India attract a duty of 10 per cent.
Steel tyre cord total domestic production is 10,000 tonnes while its consumption is 25,000 tonnes. Nylon tyre cord production is 63,695 tonnes, while the demand is 115,000 tonnes and 35,000 tonnes of rubber chemicals are produced in the country while demand is 42,000 tonnes. So the tyre industry is in serious trouble due to the low availability of raw materials and its steep price rise.
The industry is raw material intensive and this accounts for 62 per cent of the total industry turnover and 70 per cent of the total production cost. NR accounts for 42 per cent of the total raw material cost.
The percentage increase in the price of NR during the last six months was 41 per cent and even at the record price level the industry finds it difficult to get rubber.
The current price of RSS-4 grade rubber is Rs 238 a kg. Atma also pointed out that the net profit of the tyre companies is on the decline and expected to slide further in the last quarter of the current financial year.
The net profit as a percentage of net sales has come down from 6.39 per cent in October-December period of 2009 -10 to 3.14 per cent in the same period of the current financial year. The industry has a turnover of Rs 30,000 crore with an export basket of Rs 3,600 crore.
Reuters adds: Global tyre makers bought some quantity of Indonesian rubber and demand from trading houses in Southeast Asia also stirred up trading, but main consumer China was on the sidelines although physical prices had dropped from record highs, dealers said on Thursday (Feb 24).
Indonesian SIR20 was traded on Thursday (Feb 24) at 244 US cents a pound ($5.38 a kg) for May shipment. Late on Wednesday (Feb 23), SIR20 for April delivery changed hands at 245.00 and 246.50 cents a pound ($5.40 and $5.43 a kg), with buyers including Japan's largest tyre maker Bridgestone.
(Business Standards, India, February 25, 2011)

Car Prices May Rise Up To Rs 25,000 Due To Higher Commodities Costs in India

Car companies are likely to raise prices by up to 2-3% next month, translating into an effective increase of around 10,000 for cars such as Maruti Swift , Hyundai i20 and Honda Jazz in India. The premium models like Toyota Camry or Skoda Superb will be costlier by over Rs 25,000.
"There is immense pressure to increase prices as key commodities like steel and rubber have touched all-time high in recent months. While the negotiations for our new long-term supply contract are underway, suppliers are quoting much higher prices," S Maitra, managing executive officer (supply chain) Maruti Suzuki said.
The company had raised prices by up to 2.4% in January for most of its cars to contain increasing input costs.
The auto sector has seen major rise in raw material costs as high consumption commodities such as steel, rubber, aluminium, copper, nickel have gone up in the range of 20-45% in November-February months over the same period last year. Hit by higher commodity prices, Automobile majors such as Maruti Suzuki and Hero Honda posted 20% decline in year-on-year net profit for the October-December quarter.
Other companies are also toying with the idea even if they are not willing to comment officially on price hike. "We haven't taken a final call yet, though input cost pressures are going beyond our control," a senior executive of Hyundai Motor India said.
The Japanese carmaker Toyota Kirloskar Motors would review the price next month. "We evaluate our price position on three-month basis and any price rationalisation could happen only next month," Toyota Kirloskar deputy managing director (marketing) Sandeep Singh said.
The price indications come at a time when the government itself is contemplating a 2% hike in excise duty across the auto sector to take it to the pre-stimulus level of December 2008. The government's decision to hike excise will automatically force all auto companies to pass on the cost to customers in the same ratio.
(The Economic Times, India, February 25, 2011)