Monday, October 28, 2013

Expect better days on U-turn

Rubber prices in India have slumped on increasing imports and major consumers keeping away from the local market. Natural rubber growers are concerned over daily fall in natural rubber prices, which has reached `.159 a kg at Kottayam, lowest since 26th April 2013. According to growers there had been a mismatch between the input cost and the price they fetch. Growers, traders and political parties hold the steady increase in natural rubber import by the user industry as main factor for decline in domestic prices.

International prices of rubber have fallen too, in the wake of slowdown in the automobile industry. Since the international prices (RSS3 at `.155.23 a kg) have been ruling lower than the domestic prices, Indian tyre manufacturers prefer imports. Rubber4U estimate that if the import continued at the current level, the domestic natural rubber prices may touch `.155 a kg level, before making a U-turn, as major consumers starts to increase their inventory through local purchase.

On Saturday, RSS4 grade closed at `.159 a kg at Kottayam, showing a negative trend. While today, National Multi Commodity Exchange November futures trading at `.159.15 a kg, December at `.160.50 and January 2014 at `.162.30 a kg at 12.15 IST. RSS3 grade closed at `.155.23 a kg at Bangkok and Malaysian SMR20 closed at `.142.54 a kg. While Tokyo Commodity Exchange, November futures series closed at ¥246.4 a kg, December at ¥248.7, January 2014 at ¥251.4, February at ¥254.7, March at ¥257.5 and the contract for delivery in April 2014 at ¥260 a kg. On Tuesday most probably market is expected to be in green.

Tommorrow, Reserve Bank of India will be taking some measures in its monetary policy review and will have to wait and watch whether it is going to retain CRR and repo rates or hike the rates.

Read lot more in Rubber4U – 1st November 2013 issue

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