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
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