Monday, January 17, 2011

It is really a grower’s paradise now

As the main season in production of natural rubber is coming to an end, growers are reluctant to sell their stock immediately in the hope of getting higher price, as the prices are rising daily. This affects the supply of natural rubber in the domestic market and the rubber good manufacturers are not getting rubber even at higher prices.

Today natural rubber RSS4 grade price reached a high of Rs 225/- a kg on strong global cues coupled with high demand. In Bangkok, price of RSS3 grade was at Rs 251.91 a kg.

The nourishing global market along with reports of low production and rising crude prices led to hoarding by growers and local traders expects the market would remain bullish for the next couple of months and are in the hope of price crossing Rs 250 a kg.

The huge gap in the domestic and global trading prices favours exports and indications are now bright for a rise in exports in the coming months.

The rubber-based industries, especially the tyre industry are now facing a serious crisis as imports are not viable even at a reduced duty of 7.5%.

Last month, the government had announced that it will permit the import of a maximum of 40,000 tonnes of natural rubber at a concessional duty rate of 7.5% by 31st March 2011, with the aim of checking rising domestic prices. Today government invited applications for import of up to 40,000 tonnes of natural rubber by the end of the current fiscal at a concessional duty rate of 7.5%.

Demand of tyre manufacturers to ban futures trading in rubber has been rejected. Managing Director and CEO of National Multi Commodity Exchange of India - Anil Mishra has urged tyre manufacturers to actively get involved in the futures market rather than keeping away from it.

Read lot more in Rubber4U – 1st February 2011 issue

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