Tight domestic supply may increase import

The rupee fell to a new low against the U.S dollar because of U.S Federal Reserve suggestions -will soon taper bond buying. There have been buyers from India recently to buy natural rubber, but bids from Indian buyers are low because the weak rupee.

Supply of natural rubber is extremely tight in the domestic markets as there has been no rubber tapping in Kerala for more than two weeks because of monsoon rains. Consuming sector has been forced to look overseas for supply. Growers are not releasing stocks as they are expecting price rise, due to which there is a possibility that rubber imports by India may rise and according to an estimate by Association of Natural Rubber Producing Countries, India will import 183,000 tonnes this year.

Today, prices of Indian RSS4 grade rubber closed at `.175.50 a kg at Kottayam, while on the National Multi Commodity Exchange July futures were trading at `.172.73, August at `.168.55, September at `.165.52 and October at `.162.50 a kg., at 4.00 pm IST.