World natural rubber markets remained volatile in the face of the 11th March 2011 earthquake, tsunami and nuclear plant disaster that struck northern Japan. After a fall in prices, today natural prices rose by Rs 14 to Rs 201 per kg at Kottayam, due to slight recovery in global markets. Natural rubber prices at Bangkok marginally gain by Rs 3.24 to Rs 204.62.
Domestic natural rubber price recovered due to marginal recovery in the Tokyo Commodity Exchange (TOCOM). But at this moment nobody can state for sure that the recovery in rubber markets would continue as international markets are still reeling under pressure of the shutdown of almost whole of the economy in Japan. The disruption is temporary and when the world's third-largest economy starts rebuilding again the demand for everything would zoom.
Japan accounts for 7% of the global demand for natural rubber. A few plants which have to be shut down, due to power supply stoppage and safety concerns, will resume production on restoration of electricity supply. The closure these plants for a few days cannot impact on the commodity’s global demand in a significant way. The disaster is unlikely to have a noticeable impact on global economy, as Japan has not been a driver of the global recovery from the economic meltdown in 2008.
Read lot more in Rubber4U – 1st April 2011 issue
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