The hike in interest rates will impact the auto sector. The interest rate on automobile loans is expected move up, resulting in weak demand for the vehicles. The sluggish growth in auto sales will impact tyre industry, which accounts for 65% of natural rubber demand. The natural rubber production season is expected to begin from mid August and Kerala accounts for 90% of the natural rubber production and the growers, who are already under fears of an imminent price fall owing to the government decision, may suffer further damage. But some dealers are of view that the prices may not see any decline immediately as producers would have to hold back stocks to limit any sharp fall.
Read lot more in Rubber4U – 1st August 2011 issue
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