Petrol price reduced while diesel hiked

With the decline in international oil prices, petrol price was reduced by `.1.51 a litre (`.1.82 a litre including taxes in Delhi), while diesel rates are hiked by 50 paise a litre (`.0.57 a litre including taxes in Delhi), which is effective from midnight. Rates will vary from city to city depending on local sales tax or VAT.

Read lot more in Rubber4U – 1st September 2014 issue

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Sale of rubber stockpiles delayed

The National Council for Peace and Order is likely to delay the sale of 210,000 tonnes of rubber in stockpiles. The sale would not go ahead without measures in place to ensure prices remain stable.

To comply with a Supreme Court ruling, the finance minister passed a regulation that applied the 10% VAT to 14 agricultural products, including rubber. The Indonesian national alliance of rubber producers has rejected the imposition of 10% value-added-tax, which would disrupt its production and exports. The measure comes at the wrong time when farmers are struggling against falling rubber prices. The situation could worsen whenever rubber prices gained as farmers would have to pay a higher tax.

The tyre manufacturers are reaping the benefit of falling rubber prices. While with the revival in auto demand tyre makers will have the advantage of both lower raw material price and growth in sales volume. Replacement market already giving a good business, the outlook for the industry is healthy.

As expected, Tokyo Commodity Exchange, August 2014 futures series closed at ¥188.2 a kg, September at ¥190.1, October at ¥193, November at ¥196.1, December at ¥198.4 and the contract for delivery in January 2015 closed at ¥200.1 a kg. On National Multi Commodity Exchange September 2014 futures were trading at `.127 a kg, October at `.126.15, November at `.126 and December at `.126.90 a kg, at 12.10 IST.

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Rubber prices under pressure

Thailand military government has approved the sale of the country's accumulated rubber stocks and is in negotiations with potential buyers. Country spent $689 million in accumulating rubber stocks under earlier programs.

The National Council for Peace and Order (NCPO) has approved a budget of 5.94 billion baht for the overhaul of the rubber industry as proposed by the Natural Rubber Policy Committee. The measures involve maintaining a stock to stabilise prices, improving planters’ liquidity, developing the rubber market and conducting research and development on rubber products. NCPO has also agreed to allocate 10 billion baht to be loaned to farmers’ organizations to buy rubber from the planters and another 15 billion baht to be lent to private companies to upgrade their machinery in the production of finished rubber products.

In an effort to help Vietnamese companies compete in the world market, the Ministry of Finance is considering cutting the rubber export tax to zero from the current rate of 1%.

The benchmark RSS4 grade rubber closed at `.129 a kg at Kottayam, while RSS3 grade closed at `.109.86 a kg at Bangkok and Malaysian SMR20 closed at `.100.25 a kg. On National Multi Commodity Exchange September 2014 futures closed at `.127.05 a kg, October at `.125.95, November at `.126.44 and December at `.126.84 a kg. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥187.3 a kg, September at ¥189.2, October at ¥192.6, November at ¥195.6, December at ¥197.7 and the contract for delivery in January 2015 closed at ¥199.6 a kg. On Wednesday the market is expected to trade in the range of ¥198 & ¥202 a kg and may close in green.

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Rubber surplus to shrink

According to the International Rubber Study Group, global surplus of natural rubber will shrink 46% in 2015 as demand expands and farmers reduce tapping. Natural rubber production will outpace demand by 202,000 tonnes from 371,000 tonnes in 2014.

According to The Rubber Economist Ltd., inventories will reach 3.79 million tonnes by the end of 2014 and 4.33 million tonnes by 2015. Reserves will increase to the equivalent of 3.9 months of consumption at the end of 2014. Due to continued decline in natural rubber prices, farmers are showing less interest in tapping, while tyre demand is boosting usage. On Tokyo Commodity Exchange, the contract for delivery in January rose 0.3% to settle at 197.5 a kg.

The benchmark RSS4 grade rubber closed at `.130 a kg at Kottayam, while RSS3 grade closed at `.110.67 a kg at Bangkok and Malaysian SMR20 closed at `.100.81 a kg. On National Multi Commodity Exchange September 2014 futures were trading at `.128.70 a kg, October at `.127.90 and November at `.128 a kg, at 16.15 IST. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥182.5 a kg, September at ¥188, October at ¥190.6, November at ¥193.4, December at ¥195.8 and the contract for delivery in January 2015 closed at ¥197.5 a kg.

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Rubber Forecast 2014-15

For viewing the forecast

Rubber4U

Rubber4U - 15th August 2014 issue

Will there be a rebound shortly?

The domestic rubber prices are moving in line with the global prices, which have been sliding for some time due to oversupply of the commodity and lack of demand. The recent declaration by Union Commerce Minister - Nirmala Sitharaman that the import duty on natural rubber will not be raised further has only compounded grower’s woes. The drop in rubber prices seems to have affected the growers very badly. Even if the government look at the prospect of exporting rubber by providing subsidy to help the growers, then the question arise about quality and price.

The benchmark RSS4 grade rubber closed at `.131 a kg at Kottayam, while RSS3 grade closed at `.114.41 a kg at Bangkok and Malaysian SMR20 closed at `.102.03 a kg. On National Multi Commodity Exchange August 2014 futures were trading at `.128.25 a kg, September at `.128.78, October at `.128, November at `.128 and December at `.128.50 a kg, at 16.45 IST. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥185.6 a kg, September at ¥188.5, October at ¥190, November at ¥193.3, December at ¥196.1 and the contract for delivery in January 2015 closed at ¥198.1 a kg.

What our readers say: http://rubber4u.com/Public/Views.pdf

For 2014-15 Rubber Forecast, Read 15th August 2014 issue