Rubber summit in the wake of panic

In the wake of global economic slowdown and the slump in the auto and tyre sector, the global rubber industry leaders and experts will arrive in Kochi tomorrow to participate in the Indian Rubber Summit and Dinner (IRSD 2014) to be held at Hotel Crowne Plaza, Kochi-Kerala. The theme of the event is ‘Rubber Industry - Taking on Challenging Times’. A major feature of the event is the presentation of prestigious ‘Rubber Man of the Year 2014’ awards to Neeraj Kanwar, vice-chairman and managing director of Apollo Tyres Ltd., as outstanding performers in the rubber industry. The event is organised by Rubber Asia, in association with Rubber Board of India and All India Rubber Industries Association.

The Kerala government’s efforts to drive the market higher have failed and now rubber growers want only a result oriented programme to get a remunerative price for their produce, as rubber prices dropped to levels of `.120 a kg (Forecasted by Rubber4U in 15th August 2014 issue). Rubber growers are panicking and will not hesitate to shift to other crops that will be more profitable. The growers are reluctant to continue tapping as returns for them are low even as labour costs remain high.

Read lot more in Rubber4U – 1st October 2014 issue

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

Rubber prices climbs back

Thai government claimed it sold half the country's rubber stockpile, which is about 1.6% of annual global rubber production. Thai government officials said they are in talks with three potential buyers over selling the rest of the stockpile.

Soft loans and cheap fertilizer to farmers is not enough, hence, Thailand rubber growers demand stockpile sale probe and threaten protests. But the government panel agreed today to expedite subsidy payments to rubber farmers in exchange for them dropping planned street protests. The subsides constitute the last 10% of a 30 billion baht package approved earlier to aid farmers, who have been hit hard by tumbling rubber prices. Thailand's huge stockpile of rubber has pushed down prices and the industry needs reform if the market is to rebound.

The Kerala plantation industry has taken strong exception of the government’s decision to enhance plantation tax by 100% and land tax by 150%, at a time when the industry is going through a tough time. The move would affect the industry badly, as the prices of rubber have been falling drastically. Gilbert Dsouza, president of Association of Planters of Kerala said there is a mismatch between the high cost of production and price realization and this has created a serious cash flow position to the plantation industry.

Major rubber consumers continued to stay away from the domestic market, while rubber prices managed to regain strength on covering purchases at lower levels.

The benchmark RSS4 grade rubber closed at `.124 a kg at Kottayam, while RSS3 grade closed at `.100.73 a kg at Bangkok and Malaysian SMR20 closed at `.93.32 a kg. On National Multi Commodity Exchange October 2014 futures closed at `.120.61 a kg, November at `.120.44, December at `.120.52 and January 2015 closed at `.121.08 a kg. On Tokyo Commodity Exchange, September 2014 futures series closed at ¥176 a kg, October at ¥178.6, November at ¥181.6, December at ¥185.2, January 2015 at ¥187.6 and the contract for delivery in February 2015 closed at ¥189.2 a kg.

Read lot more in Rubber4U – 1st October 2014 issue

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

Start of consolidation period

Inflation fell sharply to a nearly five-year low at 3.74% in August 2014, as compared to 5.19% in July and 6.99% compared to same month of 2013. The annual rate of inflation, based on the final index, for June was revised to 5.66% from 5.43% reported on that date.

Department of Official Language under Ministry of Home Affairs, Government of India has awarded Indira Gandhi Rajbhasha Award (second prize) to Rubber Board of India for excellence in implementation of official language policy. Dr. A. Jayathilak, Chairman-Rubber Board received the award from the Hon’ble President of India - Pranab Mukherjee in a function held at Rashtrapathi Bhavan.

The benchmark RSS4 grade rubber closed at `.122.50 a kg at Kottayam, while RSS3 grade closed at `.100.19 a kg at Bangkok and Malaysian SMR20 closed at `.92.26 a kg. On National Multi Commodity Exchange September 2014 futures closed at `.121.55 a kg, October at `.121.52, November at `.121.68, December at `.122.10 and January 2015 closed at `.121.58 a kg. Tommorrow the market may touch a low of `.120 a kg for September contract and may close in green. On Tokyo Commodity Exchange, tommorrow the market is expected to touch a low of  ¥191 a kg for February contract and most probably may close around ¥193 a kg.

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

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

Rubber4U

Rubber4U - 15th September 2014 issue

AIRIA Office Bearers

Prices at multi-year low and still under pressure

The auto sales momentum seen in the last couple of months have given a positive sales volume both in the original equipment and replacement tyre market. Fall in crude prices to US$100 per barrel is a big positive outlook for tyre manufacturers as 30% of raw material cost come from crude derivatives while 50% comes from natural rubber. While in domestic market due to poor demand from the tyre sector, which consumes over 50% of the natural rubber production in the country and bear trend in the overseas market put pressure on prices despite disruptions in tapping owing to heavy South-West monsoon.

Domestic natural rubber prices have seen the sharpest fall in five years, hitting `.121 a kg. Rubber prices are down 28.40% from the average of `.169 a kg in January. A slowdown in demand along with over supply in markets has sent international rubber prices spiraling down. According to experts, increase in acreage of rubber about seven years ago in key rubber producing countries like Thailand and Malaysia has now translated into higher supply. Fortunately, for rubber goods manufacturers, it coincides with a contraction in demand from China, the world’s leading tyre manufacturing country. There’s news of a rubber inventory pile-up in China, which leaves scope for a further drop in prices from current levels.

The benchmark RSS4 grade rubber closed at `.121 a kg at Kottayam, while RSS3 grade closed at `.100.86 a kg at Bangkok and Malaysian SMR20 closed at `.92.21 a kg. On National Multi Commodity Exchange September 2014 futures closed at `.116.97 a kg, October at `.116.76, November at `.116.94, December at `.117.42 and January 2015 closed at `.119.58 a kg. Tommorrow the market may touch ¥116 a kg tag, for September contract. On Tokyo Commodity Exchange, September 2014 futures series closed at ¥177.5 a kg, October at ¥177.8, November at ¥181.7, December at ¥184.9, January 2015 at ¥187.5 and the contract for delivery in February 2015 closed at ¥188.6 a kg. Tommorrow the market is expected to touch ¥185 a kg tag, for February contract.

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

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

Rubber settles lower

The Tokyo Commodity Exchange rubber contract for February delivery was down ¥5.6 a kg to settle at ¥191 per kg. It fell to an intraday low of ¥190.8. Investors sold contract to stop losses as they saw the yen rising against the dollar.

The benchmark RSS4 grade rubber closed at `.124 a kg at Kottayam, while RSS3 grade closed at `.102.82 a kg at Bangkok and Malaysian SMR20 closed at `.94.76 a kg. On National Multi Commodity Exchange September 2014 futures were trading at `.117.64 a kg, October at `.117, November at `.117 and December at `.117.40 a kg, at 15.30 IST. On Tokyo Commodity Exchange, September 2014 futures series closed at ¥181 a kg, October at ¥181.2, November at ¥184.2, December at ¥187, January 2015 at ¥189.6 and the contract for delivery in February 2015 closed at ¥191 a kg.

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

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