Tuesday, December 16, 2014

Market improved on fresh buying


During April-November 2014 period, the cumulative value of exports increased 6.01% to `.1305792.96 crore, compared to `.1231786.75 crore during the same period of 2013. While cumulative value of imports for the period April-November 2014 was `.1915697.85 crore as against `.1801892.93 crore during the same period of 2013, registering a growth of 6.32%. The trade deficit for April-November 2014 was estimated at `.609904.89 crore.

The rupee on 28th August 2013 hit a lifetime low of 68.85 against the US dollar on strong demand for the American currency. For the FY 2014-15, the rupee dropped to its weakest level of 63.46 against dollar on 16th December 2014, as the dollar strengthened against other global currencies.

India's wholesale price inflation in November eased to 0%, compared to 1.77% in the previous month. The index for the rubber and plastic products group declined by 0.1% due to lower price of rubber products.

Kerala has sought `.1000 crore from Centre's Price Stabilisation Fund to provide relief to rubber growers suffering due to sharp fall in price of natural rubber. The Kerala Congress (M) delegation stressed that natural rubber imports into the country should be banned till the domestic price stabilised to a remunerative level. They pointed out that with Rubber Board statistics; it proves that there is a huge stock of rubber in the country, there is no justification for imports projected against the coming months.

Thailand rubber growers threatened to launch a massive protest if the government failed to increase prices to 80 baht per kg from about 40 baht currently within a month.

China’s import tariffs for rubber are currently set at 20% of the value and capped at 1,200 yuan a tonne. According to analysts, the ministry was expected to raise the cap to 1,600 yuan a tonne following recommendations by the local rubber association.

The market improved on fresh buying and short covering as sellers stayed back following the moderate gains. The benchmark RSS4 grade rubber closed at `.114.50 a kg at Kottayam, while RSS3 grade closed at `.102.53 a kg at Bangkok and Malaysian SMR20 closed at `.93.26 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.113.71 a kg, January 2015 at `.114.69 and February at `.115.98 a kg. On Tokyo Commodity Exchange, December 2014 futures series closed at ¥181.5 a kg, January 2015 at ¥187.6, February at ¥193, March at ¥196.6, April at ¥200 and the contract for delivery in May 2015 closed at ¥201.8 a kg. On Wenesday, most probably Tocom futures contract for delivery in May 2015 may trade in positive range between ¥200 & ¥207 a kg.

To read Rubber4U – 15th December 2014 issue: http://rubber4u.com/Public/R4U12b.pdf

Sunday, December 14, 2014

Rubber4U

Will industry revive from crisis?


Malaysia, Indonesia and Thailand are intensifying their efforts to help stop the decline in world rubber prices which is affecting their economies and planters. Plantation Industries and Commodities Minister, Amar Douglas Uggah Embas, said 11 Association of Natural Rubber Producing Countries (ANRPC) nations contribute 95% to the world’s natural rubber supply and if we all worked together, it would make a big impact in handling the issue.

Indian Rubber Growers Association (IRGA) urged the government to immediately increase the import duty to 25%. The Kerala Government should also facilitate more uptake of rubber from the State to improve prices by way of tax concessions and explore the possibility of rubberisation of 20% of roads every year.

IRGA has also asked the domestic tyre manufacturers to buy rubber from India at the landed cost of imported rubber. Otherwise, the growers have threatened to boycott domestic tyre manufacturers and resort to buying of cheaper imported tyres, the same way as the raw material is being imported by the tyre industry. The growers association comprising UPASI, APK, IRGA etc have filed a petition under the Provisions of Safeguard before the Directorate of Safeguards-New Delhi to protect the domestic rubber growers from un-controlled and unrestricted imports.

The benchmark RSS4 grade rubber closed at `.113.50 a kg at Kottayam, while RSS3 grade closed at `.96.52 a kg at Bangkok and Malaysian SMR20 closed at `.89.36 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.114.05 a kg, January 2015 at `.112.92 and February at `.113.33 a kg. On Tokyo Commodity Exchange, December 2014 futures series closed at ¥179.7 a kg, January 2015 at ¥184.8, February at ¥188.4, March at ¥192.2, April at ¥194.6 and the contract for delivery in May 2015 closed at ¥195.9 a kg. On Monday, most probably Tocom futures contract for delivery in May 2015 may trade in positive range between ¥195 & ¥205 a kg.

To know stock difference read Rubber4U – 15th December 2014 issue: http://rubber4u.com/Public/R4U12b.pdf
For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Tuesday, December 9, 2014

Rubber slips further down as oil prices falls


The crude oil price has fallen to its weakest point since October 2009 at US$62.87 per barrel, which has dropped slightly following the publication of China's monthly trade data, which came in well below the expectations. China's State Reserves Bureau is to buy 128,500 tonnes of rubber for its stockpiles, but market participants doubt the move would offer support to prices.

Rubber farmers are threatening to march on Bangkok next year if their demands for higher prices and an industry rescue plan are not met. The Thai government has announced four more short-term measures to arrest plummeting rubber prices ahead of a planned protest by farmers. While Tokyo Commodity Exchange rubber contract for May delivery had fallen to ¥193.6 per kg. It earlier in the day it touched a low of ¥192.7 a kg.

The benchmark RSS4 grade rubber closed at `.115 a kg at Kottayam, while RSS3 grade closed at `.95.28 a kg at Bangkok and Malaysian SMR20 closed at `.88.80 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.113.32 a kg, January 2015 at `.113.36 and February at `.114.24 a kg. On Tokyo Commodity Exchange, December 2014 futures series closed at ¥180.7 a kg, January 2015 at ¥182.6, February at ¥186.1, March at ¥190, April at ¥192.2 and the contract for delivery in May 2015 closed at ¥193.6 a kg.

For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Wednesday, December 3, 2014

Inventories declining


Kerala chief minister Oommen Chandy informed the Assembly that government would demand a curb on import or hike in the import duty of rubber. The issue would be brought to the notice of the Prime Minister Narendra Modi when a state delegation meets him soon to apprise him of the state's concern. Further fall in price of rubber would not only adversely affect farmers, but also the state's economy. It would also ultimately hit tyre manufactures in the country, as production would fall with farmers shifting to other crops

The recent slump in oil prices continued to weigh on global markets. Brent crude oil dropped to $67.53 a barrel before recovering to trade around $70.54 a barrel. India, world's fourth largest oil consumer annual imports 3.8 million barrels of crude per day. As on 1st December, the international crude oil price of Indian Basket declined to US$ 67.72 a barrel. Rupee closed weaker at `.62.14 a US$ on 1st December as against `.61.97 a US$ on 28th November. Reserve Bank of India kept interest rates unchanged at 8% as widely expected.

According to the nation’s Ministry of Commerce, Thailand’s natural rubber exports declined 11% to 291641 tonnes in October. According to a data from the Rubber Trade Association of Japan, as on 20th November, crude rubber inventories at Japanese ports stood at 9,791 tonnes, down by 5.8% compared to 10 days earlier. Rubber inventories in the warehouses monitored by SHFE declined 24.3% to 136531 tonnes.

The benchmark RSS4 grade rubber closed at `.116.50 a kg at Kottayam, while RSS3 grade closed at `.97.48 a kg at Bangkok and Malaysian SMR20 closed at `.91.84 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.114.75 a kg, January 2015 at `.115.77 and February at `.117.02 a kg. On Tokyo Commodity Exchange, December 2014 futures series closed at ¥184.1 a kg, January 2015 at ¥187.5, February at ¥190.8, March at ¥194.7, April at ¥196.7 and the contract for delivery in May 2015 closed at ¥198.2 a kg. On Thursday, most probably Tocom futures contract for delivery in May 2015 may trade between ¥198 & ¥202 a kg.


Rubber4U – 1st December 2014 issue: http://rubber4u.com/Public/R4U12a.pdf
For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Thursday, November 27, 2014

While oil falls, rubber follows it



Crude oil prices have fallen 30% since June on sluggish global demand and rising production from the US. Today, the Brent crude price closed at $77.75 a barrel, while WTI crude closed at $73.69 a barrel. US January crude contract may drop to a 4½ year low of US$69 a barrel.

China's central bank cut its benchmark lending and deposit rates last week for the first time in more than two years, taking markets completely by surprise, and is expected to ease policy further.

Reserve Bank of India (RBI) will have to take into account global factors while determining policy rates in India. The economy around the world faces a trend of disinflation owing to slowing economies and a sharp drop in crude oil prices. The past few weeks have witnessed a heated debate on whether the RBI should cut policy rates or maintain status quo. On 2nd December, one can expect a surprise.

The government may extend excise duty concessions on automobiles beyond 31st December 2014 as the industry continues to struggle with sluggish demand due to high interest rates. The government is also likely to introduce the constitutional amendment bill for the goods & services tax in the winter session of parliament.

The benchmark RSS4 grade rubber closed at `.117.50 a kg at Kottayam, while RSS3 grade closed at `.99.73 a kg at Bangkok and Malaysian SMR20 closed at `.93.97 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.115.82 a kg, January 2015 at `.116.90 and February at `.118.14 a kg. On Tokyo Commodity Exchange, December 2014 futures series closed at ¥187.6 a kg, January 2015 at ¥191.5, February at ¥194.2, March at ¥197.1, April at ¥199.1 and the contract for delivery in May 2015 closed at ¥200 a kg. On Friday, most probably Tocom futures contract for delivery in May 2015 may trade between ¥196 & ¥202 a kg.

For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Thursday, November 20, 2014

Producers agrees to manage supply, to stabilise prices

Thailand, Indonesia and Malaysia, which supply around 67% of the world's natural rubber, have agreed to manage NR exports to the global market to ensure there is no excess supply and also agreed not to expand new rubber planting areas beyond targets set earlier and to boost domestic rubber consumption by 10% annually.

Rubber associations from Thailand to Cambodia have this year urged producers not to sell the commodity below a minimum price of $1.50 per kg, while Thailand later approved a subsidy plan worth around $1.8 billion to support farmers. Thai government kicked off the program four days ago for rubber growers nationwide. Rubber planters in the southern province of Satun-Thailand have received the assistance fund from the government to compensate their losses from dropping rubber prices. Each planter is entitled to a compensation of 1,000 baht per rai, with no more than 15,000 baht per household. These measures will help global rubber prices recover from their lowest levels since 2009, but they remains under pressure from slower Chinese demand.

The International Tripartite Rubber Council (ITRC) Ministerial Committee Meeting 2014, chaired by Malaysia, is expected to set up a regional rubber market within 18 months as one of the corrective measures to stabilise rubber prices. The regional rubber market will merge the markets of the main natural rubber producing countries providing better price discovery and effective hedging functions to benefit producers, consumers and market players.

The benchmark RSS4 grade rubber closed at `.117 a kg at Kottayam, while RSS3 grade closed at `.101.82 a kg at Bangkok and Malaysian SMR20 closed at `.95.09 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.115.85 a kg, January 2015 at `.115.94 and February at `.116.66 a kg. On Tokyo Commodity Exchange, November 2014 futures series closed at ¥189.6 a kg, December at ¥195.6, January 2015 at ¥199.1, February at ¥201.9, March at ¥204.5 and the contract for delivery in April 2015 closed at ¥206 a kg. On Friday, most probably Tocom futures contract for delivery in April 2015 may trade between ¥201 & ¥207 a kg.

Tuesday, November 18, 2014

Rubber price down as oil prices falls


Sluggish growth and downward pressure on inflation due to sliding global oil prices prompted the Bank of Japan to unexpectedly expand its massive monetary stimulus last month. The world's third-largest economy, Japan had been forecast to rebound by 2.1%, but GDP fell at an annualized 1.6% pace in July-September 2014. Japan's economy unexpectedly slipped into recession in the third quarter.

Crude oil prices slipped below $75 for the first time in more than four years. Cheaper crude oil means lower prices for synthetic rubber and there is a possibility that natural rubber prices may fall to `.98 per kg level. Indian rubber growers have stopped the production to cut their losses. According to them current rubber prices are not high enough to cover the cost of labour used to harvest and process the commodity.

Following requests to Chinese government leaders to buy more agricultural products from Thailand, negotiations at the ministerial level are underway for Thailand to sell 2 million tonnes of rice and 200,000 tonnes of natural rubber to China on a government-to-government basis. Company representatives will arrive in Thailand on 19th November to discuss ways investment in the rubber industry in Thailand, while trade associations will discuss China's plan to boost its investment in Thailand.

Rubber producers in Asia are to meet this week to look at more measures to push up prices, which are not far above five-year lows, including restrictions on supply to global markets.

The benchmark RSS4 grade rubber closed at `.117 a kg at Kottayam, while RSS3 grade closed at `.100.17 a kg at Bangkok and Malaysian SMR20 closed at `.92.83 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.115.35 a kg, January 2015 at `.115.55 and February at `.115.89 a kg. On Tokyo Commodity Exchange, November 2014 futures series closed at ¥187.6 a kg, December at ¥189.9, January 2015 at ¥193.5, February at ¥196.2, March at ¥198.9 and the contract for delivery in April 2015 closed at ¥200.2 a kg.

For reading Rubber4U – 15th November 2014 issue: http://rubber4u.com/Public/Abcd.pdf
For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Saturday, November 15, 2014

Industry worried about surging tyre imports


The Indian auto component industry is growing at a CGPA of 8.9% with two-wheelers being the largest domestic customer segment for the Indian auto components industry. This has encouraged two-wheeler tyre manufacturers to constantly experiment with newer technology and innovative ideas to deliver the growing market.

According to Automotive Tyre Manufacturers’ Association, tyre import has come to account for an estimated 20% of the total domestic market. Chinese government continues to provide multiple, direct and indirect, subsidies to push exports. The export prices from China are lower than that of such tyres in Chinese domestic market and also prices of similar exports originating from Thailand, South Korea. This clearly indicates dumping of tyres into Indian markets and causing injury to the domestic tyre industry.

The rubber industry is highly fragmented; producers have been unable to manage a cut in rubber supplies to a level low enough to support prices. The ban has proved hard to enforce, with millions of farmers spread over and many living from hand to mouth, forcing them to sell the commodity to get urgently needed cash. Even middlemen/traders have been forced to sell to keep their businesses running.

For reading Rubber4U – 15th November 2014 issue: http://rubber4u.com/Public/Abcd.pdf
For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Wednesday, November 12, 2014

Rubber price down as import increases


Global crude oil prices were ruling at four year lows, raising hopes of another cut in petrol and diesel prices. Today, WTI crude oil trading in red, the prices fell to $77.23 per barrel at 13.15 GMT. Indian Oil companies had reduced petrol and diesel prices by `.2.41 and `.2.25 a litre respectively on 31st October, when the Indian basket was hovering around $84.77 a barrel. A revision in fuel prices is due on Saturday. Petrol and diesel prices could come down by another `.1 to `.2 per litre. Now India is planning to take advantage of subdued crude oil prices to get concessions for long-term supply contracts with major oil exporting countries.

Tokyo rubber futures, which set the tone for tyre-grade prices, are likely to hold in a narrow range this week, due to subdued demand from China. According to preliminary trade data issued by China's General Administration of Customs, the country imported 300,000 tonnes of natural and synthetic rubber in October 2014, a 6.3% drop compared to September.

In October 2014, India's natural rubber production fell by 32.56% to 58,000 tonnes compared to 86,000 tonnes in the same period of 2013, as some farmers stopped tapping after prices fell to their lowest level in five years. While natural rubber consumption in the month increased 1.8% to 83,000 tonnes, compared to 81,530 tonnes. Natural rubber imports increased 27.65% to 36,865 tonnes compared to 36,865 tonnes in October 2013.

The benchmark RSS4 grade rubber closed at `.118.50 a kg at Kottayam, while RSS3 grade closed at `.101.65 a kg at Bangkok and Malaysian SMR20 closed at `.95.22 a kg. On National Multi Commodity Exchange November 2014 futures closed at `.118.99 a kg, December at `.116.13 and January 2015 at `.116.41 a kg. On Tokyo Commodity Exchange, November 2014 futures series closed at ¥192.7 a kg, December at ¥196, January 2015 at ¥199.3, February at ¥201.1, March at ¥203.6 and the contract for delivery in April 2015 closed at ¥204.8 a kg.

For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Sunday, November 9, 2014

Will rubber rebound or go below Rs.110 a kg?


Japanese based Yokohama Rubber announced start of commercial production at its plant with an investment of over `.300 crore in India at Bahadurgarh-Haryana, which has an installed capacity of 2,000 tyres per day. Indonesian Rubber Association makes a second appeal to its members to impose strict limit on sales until the second quarter of 2015, while Malaysian government has allocated 100 million ringgit to support rubber farmers and a subsidy programme will be activated when the price of SMR20 grade rubber falls to 4.60 ringgit per kg. Thailand, Indonesia and Malaysia are likely to meet on 20-21 November to discuss plans to set prices together and reduce supply. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.3% to 173792 tonnes last week.

Ahead of the peak season in India, the rubber prices are likely to remain subdued as tyre manufacturers have already stock-piled for most of the requirements. The Kerala State Co-operative Rubber Marketing Federation Limited has begun procuring RSS-4 and 5 grade rubber directly from farmers by providing `.5 per kg more than the rates fixed by Rubber Board, under the Kerala Government’s rubber procurement scheme. A sub-committee of the panel to formulate National Rubber Policy is meeting in Kochi this week, which among other things would discuss steps to boost domestic demand for rubber and protect farmers from steep fall in rubber prices.

According to Malaysian Rubber Board director general Datuk Dr Salmiah Ahmad, the demand for natural rubber next year is expected to be higher than the supply and natural rubber prices, which are at their five-year low now, are expected to strengthen next year

According to the latest information, the benchmark RSS4 grade rubber closed at `.120 a kg at Kottayam, while RSS3 grade closed at `.101.07 a kg at Bangkok and Malaysian SMR20 closed at `.92.69 a kg. On National Multi Commodity Exchange November 2014 futures closed at `.120.95 a kg, December at `.118.72, and January 2015 at `.119.47 a kg. Tokyo Commodity Exchange, November 2014 futures series closed at ¥189.9 a kg, December at ¥193, January 2015 at ¥195.2, February at ¥198, March at ¥199.9 and the contract for delivery in April 2015 closed at ¥200.8 a kg. On Monday, most probably Tocom futures contract for delivery in April 2015 may trade between ¥198 & ¥204 a kg.

For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Tuesday, November 4, 2014

Rubber still under pressure


As availability of natural rubber is high, buyers in the global market may not go for it. Rubber is in a bearish mode. The fall in crude oil prices is a major problem. It will make synthetic rubber cheaper. As a result, natural rubber prices will drop and growers will lose interest in nursing their plantations and tapping rubber.

Brent crude fell to a multi-year low after Saudi Arabia lowered the price of oil exported to the United States, while increasing the cost to Asia and Europe. Yesterday WTI closed at US$77.19 a barrel, while Brent crude closed at US$82.82 a barrel.

The European Commission reduced its estimates for euro-zone growth, projecting the 18 Nation region's gross domestic product would climb by 0.8% in 2014 and 1.1% next year, a decline from estimates of 1.2% and 1.7%.

The benchmark RSS4 grade rubber closed at `.120.50 a kg at Kottayam, while RSS3 grade closed at `.104.04 a kg at Bangkok and Malaysian SMR20 closed at `.94.21 a kg. On National Multi Commodity Exchange November 2014 futures closed at `.121.26 a kg, December at `.119.28, and January 2015 at `.119.71 a kg. Tokyo Commodity Exchange, November 2014 futures series closed at ¥190.1 a kg, December at ¥191.8, January 2015 at ¥193.2, February at ¥195.7, March at ¥198.6 and the contract for delivery in April 2015 closed at ¥199.8 a kg. Tommorrow most probably Tocom futures contract for delivery in April 2015 may touch a low of ¥193 a kg.

For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Thursday, October 23, 2014

Bright day ahead

The domestic car sales which were lackluster in the last year festive season are sparkling this year. Festive season is a period when most car companies see at least 20% growth in sales. The drop in fuel prices and stable interest rates has increased the consumer confidence. After a slowdown of almost three years, the industry this year is seeing steady volume growth every month and auto industry expects the demand to remain strong during the year ahead.

Thailand Industry Minister Chakramon Phasukvanich expressed confidence about the short and long term measures taken by the government to address the low rubber price will be successful. The government will be removing excess rubber from the market during November and April, which will be achieved by having six banks providing loans to latex processing businesses to buy the excess rubber. This measure is expected to remove 200,000 tonnes of latex from the system and result in an immediate increase of rubber price.

Today, the benchmark RSS4 grade rubber closed at `.125 a kg at Kottayam, while Malaysian SMR20 closed at `.96.26 a kg. On National Multi Commodity Exchange November 2014 futures closed at `.125.62 a kg, December at `.124.82, and January 2015 at `.124.99 a kg. Tokyo Commodity Exchange, October 2014 futures series closed at ¥180.7 a kg, November at ¥184, December at ¥187.3, January 2015 at ¥191.2, February at ¥194.3 and the contract for delivery in March 2015 closed at ¥195.9 a kg. Tommorrow most probably RSS3 grade may close around `.105.50 a kg at Bangkok and Malaysian SMR20 may close around `.97.60 a kg. While it is expected that Tocom the contract for delivery in March 2015 may close around ¥200 a kg.


For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Saturday, October 18, 2014

NR still under pressure as crude oil looks bearish

Fall in crude oil prices spells bad news for natural rubber growers. With Brent crude oil prices plunging to a four-year (has fallen to US$80 per barrel), natural rubber prices, too, are set to come under pressure, because as crude prices drop, the rates of synthetic rubber will also drop. Consumption of synthetic rubber in India has increased in the first quarter of 2014-15 to 58.9% against 57.6% last year.

The government should encourage rubber replantation and offer rubber growers subsidies to plant new trees. Automotive Tyre Manufacturers’ Association wants these measures implemented in order to address the reluctance of growers to plant new trees, which can’t be tapped for their first six to seven years. Without encouragement, the ATMA fears growers will continue to tap older lower yielding trees.

According to a Kerala state government official, state will buy rubber at `.5 per kg more than prevailing market price from farmers and the cabinet has decided to buy rubber through state-run agencies. Kerala chief minister Oommen Chandy demanded a total ban on rubber imports, besides seeking imposition of higher duty rates on synthetic, sheet and block rubber and other rubber products.

The Indian government has fixed new gas price at US$5.61 per million british thermal unit, increased from US$4.2 per million british thermal unit earlier, while it has reduced diesel price in Delhi by `.3.37 per litre following sharp fall in crude oil prices in international markets. This new gas price hike will be effective from 1st November, while the diesel price cut will be effective from today midnight.

Rubber prices, however, improved in Asian market as China came up with better trade data and on talks of producers in South-East Asia planning supply curbs. According to the latest data, benchmark RSS4 grade rubber closed at `.123 a kg at Kottayam, while RSS3 grade closed at `.99.58 a kg at Bangkok and Malaysian SMR20 closed at `.92.16 a kg. On National Multi Commodity Exchange November 2014 futures closed at `.122.71 a kg, December at `.121.52, January 2015 at `.122.25, February at `.121.20, March at `.121.80 and April at `.122 a kg. Tokyo Commodity Exchange, October 2014 futures series closed at ¥178.2 a kg, November at ¥181.5, December at ¥182.6, January 2015 at ¥185.6, February at ¥188.5 and the contract for delivery in March 2015 closed at ¥189 a kg.


For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Wednesday, October 8, 2014

Meeting to plan out revival strategy


Major rubber producing countries are still looking for solutions. The Association of Natural Rubber Producing Countries will meet on 13th October in Kuala Lumpur; while, Malaysia is also proposing to preponed International Tripartite Rubber Council meeting scheduled for 12th December to sometime in early November to resolve issues related to rubber industry.

The Malaysian Rubber Glove Manufacturers Association has urged the government to provide tax breaks in Budget 2015 to encourage rubber glove sector to be more aggressive in implementing more automation and creation of proprietary technology.

On 7th October, benchmark RSS4 grade rubber closed at `.121 a kg at Kottayam, while today RSS3 grade closed at `.95.76 a kg at Bangkok and Malaysian SMR20 closed at `.87.77 a kg. On National Multi Commodity Exchange October 2014 futures were trading at `.122.15 a kg, November at `.119.95, December at `.119.65 and January 2015 at `.119.79 a kg at 12.30 IST. Tokyo Commodity Exchange, October 2014 futures series closed at ¥173.6 a kg, November at ¥175.9, December at ¥178.4, January 2015 at ¥181.1, February at ¥181.8 and the contract for delivery in March 2015 closed at ¥181.1 a kg.

For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Monday, October 6, 2014

Urging members to sell at floor price

Thailand and Malaysia have thrown their support behind an Indonesian proposal to set a $1.50 per kg minimum floor price plan. In a statement Malaysian Rubber Board said the move was in accordance with the recommendation by International Rubber Consortium Ltd urging member countries not to offer natural rubber below the stipulated price in order to address the current low natural rubber price.

Dealers are confident that natural rubber market fundamentals will remain intact and promising, as can be seen from the latest statistical bulletin released by the International Rubber Study Group. The global stock level has declined to approximately 2.55 million tonnes in June 2014 from 3.01 million tonnes as at December 2013.

Indian Farmers Movement (INFAM) has urged the Union government to formulate a national policy for road rubberisation scheme, at least in national highways, to enhance internal consumption of natural rubber, which would benefit lakhs of rubber farmers in the country. INFAM pointed out that the government had taken several effective measures during 2002-03 periods when farmers faced a similar situation. Such measures are needed now to save the rubber sector from crisis.

The latest closing of the benchmark RSS4 grade rubber was at `.120.50 a kg at Kottayam, while RSS3 grade closed at `.94.56 a kg at Bangkok and Malaysian SMR20 closed at `.87.59 a kg. On National Multi Commodity Exchange October 2014 futures closed at `.120.34 a kg, November at `.118.14, December at `.117.88 and January 2015 at `.117.65 a kg. Today, on Tokyo Commodity Exchange, October 2014 futures series closed at ¥168.5 a kg, November at ¥171.2, December at ¥173.5, January 2015 at ¥175.8, February at ¥177.2 and the contract for delivery in March 2015 closed at ¥176.4 a kg.

Read lot more in Rubber4U – 15th October 2014 issue

For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Thursday, October 2, 2014

How do they ensure?


Rubber futures in Tokyo and Singapore slumped on 1st October to the lowest levels since 2009, suggesting the producers may need to take more drastic measures. Thailand and Malaysia have thrown their support behind an Indonesian proposal to set a $1.50 per kg minimum floor price plan. The measure will prevent natural rubber price from falling further and revive market sentiment. While Indonesian Rubber Association’s (GAPKINDO) move to reach out to other major growers in a call for action is viewed as a positive step by growers. Previous efforts to shore up prices by the three Southeast Asian producers have had little success in the face of abundant supply and weaker demand.

While addressing the reporters, Kerala Chief Minister Oommen Chandy said that the state government has decided to increase the use of rubber based bitumen for making and repairing roads and Public Works Department would order more rubber based bitumen from Bharat Petroleum Corporation’s Kochi Refinery. The minister further added that the hike in land registration fee and stamp duty will not be reduced or withdrawn.

On Wednesday, the benchmark RSS4 grade rubber closed at `.121.50 a kg at Kottayam, while RSS3 grade closed at `.95.56 a kg at Bangkok and Malaysian SMR20 closed at `.89.15 a kg. On National Multi Commodity Exchange October 2014 futures closed at `.120.34 a kg, November at `.118.14, December at `.117.88 and January 2015 at `.117.65 a kg. Today, Tokyo Commodity Exchange, October 2014 futures series closed at ¥166.3 a kg, November at ¥170.6, December at ¥172.7, January 2015 at ¥174.9, February at ¥175.6 and the contract for delivery in March 2015 closed at ¥175.4 a kg.

Read lot more in Rubber4U – 15th October 2014 issue
For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Friday, September 26, 2014

Nobody would be ignored


Indian rubber growers have demanded, among other things, a temporary suspension of imports for a period of six months and that import duty on natural rubber be hiked to 30% or `.40 a kg, whichever was higher against the current 20% or `.30 a kg, whichever was lower, to discourage manufacturing industry. While rubber goods manufacturing industry represented by Automotive Tyre Manufacturers’ Association, argued that the import duty rate was the highest in the world.

Kerala Finance Minister K.M. Mani appealed to the Union Government to use money from the Price Stabilisation Fund to support growers who are reeling under a steep fall in the price of natural rubber. He claimed that only `.14 crore of the total of `.1,000 crore available under the Fund had been utilised. He suggested that the Union Government double the current incentive of `.25,000 per hectare to lure more farmers into taking replanting rubber.

Union Minister of State for Commerce and Industry, Nirmala Sitharaman assured stakeholders that a decision on the crisis now gripping rubber growers would be taken without favouritism. Nobody would be ignored and everyone would be taken on board while arriving at a decision in a time-bound manner.

Today, the benchmark RSS4 grade rubber closed at `.121 a kg at Kottayam, while RSS3 grade closed at `.96 a kg at Bangkok and Malaysian SMR20 closed at `.88.79 a kg. On National Multi Commodity Exchange October 2014 futures closed at `.122.80 a kg, November at `.121.43, December at `.120.83 and January 2015 at `.120.52 a kg. On Tokyo Commodity Exchange, October 2014 futures series closed at ¥171.7 a kg, November at ¥175.6, December at ¥178.5, January 2015 at ¥182.5, February at ¥184.4 and the contract for delivery in March 2015 closed at ¥185.4 a kg.

Read lot more in Rubber4U – 1st October 2014 issue
For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Thursday, September 25, 2014

Gloomy outlook for plantation sector


The price of rubber remains low despite a low supply. Tokyo rubber futures hit a fresh 5 year low on 24th September on persistent fears of weak demand from China, China economic data was not as good as expected and weak oil prices also weighed on the market.

Thai Democrat Party called on Prime Minister Prayut Chan-o-cha to implement its five point proposal to urgently resolve price crisis facing rubber growers. Deputy leader Nipit Intarasombat said the government was on the right track to address the falling rubber prices, its policies are designed as a long-term solution. It depends on the government to decide if it wants to protect the farmers or the asphalt industry. Promoting use of rubber in road construction will raise costs, but its benefits are greater than shoring up the rubber prices.

The government should establish a policy guaranteeing that rubber is used in road construction and repair projects. The policy should stipulate that the rubber come from fresh supplies, not from the government’s stockpiles.

Prime Minister Gen Prayut thanked the rubber growers for their decision to call off a rally planned on 8th October. He has promised the government will take measures to boost prices, such as promoting the domestic use of rubber products, providing loans to rubber cooperatives and slowing rubber production.

The former Rubber Board Chairman said the production of natural rubber in the country is 8.5 lakh tonnes while the actual demand is about 9.25 lakh tonnes, but the volume of rubber imported was several times more. The excess rubber imported has been stockpiled by the rubber based companies including tyre manufacturers. This has helped them crush the local rubber producers.

A discrepancy of around one lakh tonnes of natural rubber has surfaced in the stock level data provided by rubber board at the end of August month. The industry finds that an anomaly in the calculations will affect all the stakeholders in the sector. Indian Rubber Growers Association has refuted the allegation made by Automotive Tyre Manufacturers Association and other organisations, regarding stock of natural rubber in India. The issue does not carry any relevance at this point of time, when rubber prices are low. The issue of stock was raised by ATMA deliberately to divert attention from core issues that the rubber sector in India is facing.

Prices are likely to go from bad to worse when the rainy season ends. Today, the benchmark RSS4 grade rubber closed at `.120.50 a kg at Kottayam, while RSS3 grade closed at `.96.08 a kg at Bangkok and Malaysian SMR20 closed at `.88.68 a kg. On National Multi Commodity Exchange October 2014 futures closed at `.119.75 a kg, November at `.118.55, December at `.118.67 and January 2015 at `.118.79 a kg. On Tokyo Commodity Exchange, October 2014 futures series closed at ¥166.8 a kg, November at ¥170.6, December at ¥174, January 2015 at ¥177.6, February at ¥179.6 and the contract for delivery in March 2015 closed at ¥180.9 a kg. Tommorrow the market is expected to trade between ¥180 & ¥186 a kg for March contract and most probably may close on higher side.

Read lot more in Rubber4U – 1st October 2014 issue
For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

Tuesday, September 23, 2014

Rubber prices nosedives


The economic slowdown in China followed by sluggish demand, high inventory level, oversupply of natural rubber and drop in the price of synthetic rubber has favoured for a further drop in the price of natural rubber. This trend indicates the poor off take by major consuming countries, hence a prolonged low price regime can be expected.

The United Planters’ Association of Southern India has expressed concern over the declining prices of natural rubber and sought the Centre’s help in resolving the crisis. The prices of RSS-4 grade natural rubber have fallen to `.122 a kg, compared to `.181 a kg as on 23rd September 2013, due to its unrestricted import. Many small growers have stopped tapping operations.

While rubber goods manufacturing industries have expressed concern over the disparity in rubber stock figures. In a communication to the Additional Secretary (Plantations), who is also the Chairman of the Expert Committee to draft the National Rubber Policy, the industry said rubber stock figures at the end of August as released by the Rubber Board show a discrepancy of approximately one lakh tonnes. According to the industry, based on the opening stocks of rubber in April and factoring the key parameters of production, consumption, import and export, the closing stock ought to have been 2.85 lakh tonnes at the end of August. The discrepancy of one lakh tonnes is huge and has significant consequences for all stakeholders.

Natural rubber prices nosedived in various global markets today on account of poor demand and oversupply of the commodity. The benchmark RSS4 grade rubber closed at `.122 a kg at Kottayam, while RSS3 grade closed at `.97.26 a kg at Bangkok and Malaysian SMR20 closed at `.88.84 a kg. On National Multi Commodity Exchange October 2014 futures were trading at `.117.74 a kg, November at `.117.50, December at `.117.79 and January 2015 at `.117.90 a kg, at 16.00 IST. On Tokyo Commodity Exchange, September 2014 futures series closed at ¥168 a kg, October at ¥172.2, November at ¥175.2, December at ¥178.5, January 2015 at ¥181.7 and the contract for delivery in February 2015 closed at ¥183.5 a kg.

Read lot more in Rubber4U – 1st October 2014 issue
For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf