Increasing demand may push the price up

Today natural rubber prices in Malaysia, Thailand and Tokyo increased, due to better economic data from the U.S. On 1^st October, we have forecasted that if Indian Stock Market opens in red on 3^rd October, one can expect domestic natural rubber prices moving towards north. In the next week increasing demand may push the natural rubber prices up.

After agreeing to set a benchmark price, Thailand has set a minimum natural rubber price of $3.86 per kg and the country is considering cutting down older rubber trees in a move to reduce production and improve price.

Today, the price of RSS3 grade natural rubber in the international market at Bangkok closed at Rs 203.91 per kg., SMR-20 closed at 204.71 a kg at Kuala Lumpur and on the other hand domestic RSS4 grade closed at Rs. 211 a kg at Kottayam. At the National Multi Commodity Exchange (NMCE), rubber future prices for October delivery closed at Rs 214.47 per kg and at Rs. 215.51 per kg for March 2012 delivery. At Tokyo Commodity Exchange futures prices for October delivery closed at 308.10 yen/kg and 315.20 yen/kg for March 2012 contract.

Read lot more in Rubber4U – 15th October 2011 issue

Rubber price scenario

The fall in the natural rubber prices in the international market is due to high degree of uncertainty about the European situation and its effects on economic growth. There were anxious market moves in the U.S., and is expected to see similar moves in coming days also. The euro is most likely to continue its trend deterioration until it gets really bad, forcing a resolution to come.

Most probably on Monday, Indian Stock Market may open in red and if the day continues in red then one can expect domestic NR prices moving towards north. Today, at the National Multi Commodity Exchange (NMCE), rubber future prices for October delivery closed at Rs 208.82 per kg and for November, December, January & February closed at Rs. 205.04. Rs. 206.36, Rs. 207.06 and Rs. 209 per kg, respectively.

If the above scenario happens, then there is a possibility of increase in import of natural rubber. On the other hand India’s Commerce & Industry Minister said that government may announce a relief package for exporters before Diwali. The need for the package is important as the country’s economic growth is seen moderating in the wake of turmoil in developed nations of the world.

Read lot more in Rubber4U – 15th October 2011 issue