Economy continues to recover gradually

Asia's third largest economy grew at 5.3% in the July-September quarter, down from 5.5% in the April-June quarter. India's manufacturing sector beat the expectations of economists to grow at its fastest pace in five months in November, boosted by strong export orders and a surge in output. The manufacturing sector gained momentum, which lifted output growth, while there is strong overseas demand for Indian goods.

Indicators of consumption such as auto sales and consumer non-durables production have shown signs of stabilisation in the past two months. But India's economic growth in the current financial year through March is likely to slip to 6% from 6.5% in the previous year.

Manufacturing output in China increased during November for the first time since July. The rate of expansion was only modest, but the quickest since October 2011. New orders rose for the second month in a row, while new export orders rose for the first time since April.

The Malaysian rubber market is likely to trade higher this week on expectations that global rubber demand will start to pick up. Thailand government's intervention plan to buy its own local rubber products could indirectly help support rubber prices, which is a positive indication.

The spot price of RSS4 grade rubber in Kottayam market closed at `.164 per kg. The price of RSS3 grade at Bangkok closed at `.164.96 per kg, while Malaysian SMR 20, which Indian tyre makers prefer to import, closed at `.154.50 a kg. On TOCOM rubber futures, December series closed at ¥250 a kg, January at ¥251.5, February at ¥254.7, March at ¥259.1, April at ¥261.3 and May at ¥263.5 a kg. On the AFET-Thailand market, January contract for RSS3 closed at 92 Baht/per kg, while STR20 closed at 88.10 Baht/per kg.

Read lot more in Rubber4U – 15th December 2012 issue