Railways to get proper direction

The first rail budget of the new government will be presented on 8th July by railway minister Sadananda Gowda, which is expected to pave the way for high-speed trains and private sector investment and also would be people friendly, promising more amenities to passengers.

Today the benchmark RSS4 grade rubber closed at `.143 a kg at Kottayam, while RSS3 grade closed at `.121.66 a kg at Bangkok and Malaysian SMR20 closed at `.101.41 a kg. On National Multi Commodity Exchange July 2014 closed at `.142.20 a kg, August at `.142.29, September at `.142.16 and October at `.141.77 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥193.1 a kg, August at ¥195.2, September at ¥197.2, October at ¥199.4, November at ¥201.5 and the contract for delivery in December 2014 closed at ¥203.2 a kg. Tommorrow, July future may touch ¥191 a kg.

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Industry looking for change in inverted duty structure

Automotive Tyre Manufacturers Association, in its pre-budget memorandum to the Finance Ministry, pointed out that tyres in large volumes are finding entry into India while import of raw materials was restricted as a direct outcome of these agreements. Basic customs duty on tyres is 10%, however, under various trade agreements, the duty on tyres ranges between nil to 8.6% facilitating tyre imports into India. While tyres (finished product) can be imported into India at preferential / concessional duties under various trade agreements, rubber (basic raw material) falls in the negative list (no duty concession) across most trade agreements thus impacting the tyre industry both ways. Hence, the government can increase the customs duty on tyres from existing rate of 10% to a higher rate of duty without contravening WTO provisions as there is no bound rate on tyres. The industry is looking to the new government for scrapping of inverted duty structure, so as to make the industry more competitive.

Today the benchmark RSS4 grade rubber closed at `.144.50 a kg at Kottayam, while RSS3 grade closed at `.123.88 a kg at Bangkok and Malaysian SMR20 closed at `.104.78 a kg. On National Multi Commodity Exchange July 2014 closed at `.143.54 a kg, August at `.143.68, September at `.143.10 and October at `.141.87 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥202.9 a kg, August at ¥205.3, September at ¥208.1, October at ¥210.1, November at ¥212.5 and the contract for delivery in December 2014 closed at ¥214.6 a kg. Tommorrow, the market will be in red and may touch ¥210 a kg level.

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Petrol price hiked

Rubber4U

Rubber4U - 1st July 2014 issue

Relief extended

During 2013-14, auto industry has been struggling and car sales fell 4.65% to 17,86,899 units compared to 18,74,055 units in 2012-13. In the Interim Budget presented in February 2014, excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to 8% from 12%, 24% from 30% for SUVs, 20% for mid-sized car from 24% and 24% for large cars from 27%, which is applicable till 30th June 2014. Today, Finance Minister Arun Jaitley extended the excise duty cut till December 2014. The industry hope demand to improve in the festive season between September and December.

Today the benchmark RSS4 grade rubber closed at `.148 a kg at Kottayam, while RSS3 grade closed at `.129.92 a kg at Bangkok and Malaysian SMR20 closed at `.107.59 a kg. The last traded prices on National Multi Commodity Exchange at 4.40 pm IST, for July 2014 were at `.145.01 a kg, August at `.144.91, September at `.143.90 and October at `.143 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥207.2 a kg, August at ¥209.6, September at ¥212.7, October at ¥214.8, November at ¥217.3 and the contract for delivery in December 2014 closed at ¥219.4 a kg.

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As inventory falls, prices moved up

Oil prices pull back as traders pull back from their worst case scenarios and focus on the fact that oil exports from Iraq's southern ports are near record highs. Thailand military government plans to shore up falling rubber prices by increasing domestic rubber consumption instead of intervening in the market.

After a fraud investigation at the port, banks are more careful in granting financial support. It is estimated that stocks of natural, synthetic and compound rubber slipped to 327,900 tonnes from 362,200 tonnes in mid-May. About 14% of the stock holding is compound rubber made of natural and synthetic rubber used in tyres, which dealers say is mostly tied to financing deals. The inventory of natural rubber in Qingdao has fallen more than 3% to 261,000 tonnes since May. One of the reasons why stocks have fallen is because there has been less rubber for financing and the stock is expected to fall further. A drop in Qingdao stocks is usually positive for rubber prices as it implies stronger demand.

Today the benchmark RSS4 grade rubber closed at `.147.50 a kg at Kottayam, while RSS3 grade closed at `.130.14 a kg at Bangkok and Malaysian SMR20 closed at `.107.90 a kg. The last traded prices on National Multi Commodity Exchange for July 2014 were at `.148.15 a kg, August at `.148.01, September at `.147.20 and October at `.145.75 a kg. On Tokyo Commodity Exchange, June 2014 futures series closed at ¥206.1 a kg, July at ¥207.2, August at ¥210.1, September at ¥212.7, October at ¥214.9 and the contract for delivery in November 2014 closed at ¥217 a kg. The benchmark rubber contract for November delivery dropped ¥1.3 to settle at ¥217 a kg, as profit taking and a decline in crude oil market pressured the prices.

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Welcome move

Natural rubber prices have reached the lowest point in the last five years and this situation has pushed farmers into deep financial crisis. The Association of Planters of Kerala attributed the unabated imports by rubber consuming industries as the main reason for the continuing free fall of prices and has urged the government to ban rubber imports to protect the growers from further crisis. If this trend is allowed to continue, the situation might lead to farmers' suicides, and abandon rubber cultivation or switch over to other activity.

The United Planters’ Association of Southern India (Upasi) has welcomed the move to formulate a national rubber policy. Upasi is of the view that any policy formulation should be inclusive by addressing the real concerns of the sector, which comprise more than a million natural rubber growers, 6000 micro, small and medium rubber manufacturing units and a few tyre manufacturers in the country.

Today, the benchmark RSS4 grade rubber closed at `.146 a kg at Kottayam, while RSS3 grade closed at `.127.99 a kg at Bangkok and Malaysian SMR20 closed at `.104.17 a kg. On National Multi Commodity Exchange, July 2014 futures closed at `.146.66 a kg, August at `.145.61, September at `.144.61 and October at `.142.59 a kg. On Tokyo Commodity Exchange, June 2014 futures series closed at ¥200.4 a kg, July at ¥203.1, August at ¥205.4, September at ¥207.7, October at ¥210 and the contract for delivery in November 2014 closed at ¥212.7 a kg.

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