Market linked insurance for plantation

Indian government is likely to initiate a market linked insurance scheme for plantation crops, which will be implemented on a pilot basis in 7 districts and will provide insurance cover against fluctuation in prices and yield. The revenue insurance scheme for plantation crops will be launched once the operational parameters are finalised by the government. The scheme will be funded from the price stabilisation fund for plantation crops.

While addressing at the India Rubber Meet 2016 in Goa, the event organised by the Rubber Board in partnership with stakeholder associations in rubber and related sectors, the Rubber Board chairman, A Jayathilak said excessive import of rubber products including tyres, often on account of dumping and tariff concessions offered under Free Trade Agreements (FTAs), is a critical issue. Rubber is one of the most critical, strategic and versatile raw materials in the modern world and will remain so the in the foreseeable future. Its demand and prices are positively linked to economic growth. Link between the industry and economic growth brings in fortunes during booms and hardships during busts.

According to Rubber4U estimate, domestic industry will have to face volatile situations. Currently, when the crude oil is trading at its recent low level, petrol price has not come down comparatively, due to increase in taxes. At this juncture auto sector is struggling to sustain. Think when these prices start shooting up; inflation will increase, sales quantity will decrease, so the raw material demands. But natural rubber price is expected to move to a level of `.150 a kg. As we have earlier forecasted that natural rubber price will touch `.92 a kg level, this too is also expected to happen.

The benchmark RSS4 grade rubber closed at `.107 a kg at Kottayam, while RSS3 grade closed at `.98.55 a kg at Bangkok and Malaysian SMR20 closed at `.87.30 a kg. On National Multi Commodity Exchange March 2016, the futures closed at `.105.17 a kg, April at `.108.22, May at `.110.36 and June 2016 closed at `.111.41 a kg. Tokyo Commodity Exchange March 2016 futures series closed at ¥160.4 a kg, April at ¥164, May 2016 at ¥166.7, June at ¥168.4, July at ¥170.1 and the contract for delivery in August 2016 closed at ¥171.4 a kg. On Friday, most probably Tocom futures contract for delivery in August 2016 may trade in the range of ¥174 & ¥168 a kg.

To read Rubber4U – 15th March 2016 issue: http://rubber4u.com/Public/Abcd.pdf

For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf