Rubber4U

Rubber4U - 1st April 2014 issue

Positive outlook expected

The market will be vulnerable to global movements, but it is better placed than many others. The interest rate differential between India and the West is still favourable and the view that the US will not increase rates in 2014 augurs well for India.

On 1st April, Reserve Bank of India (RBI) will announce its first bi-monthly monetary policy. On 28th January 2014, the RBI had raised repo rates by 25 basis points to 8%, in its previous monetary policy review. Now the economic indicators are good and inflation has come down, the majority of the experts see RBI holding the rates. From April 2014, RBI will hold six reviews in each financial year to take a call on the monetary policy.

The price of petrol was cut by 75 paise per litre, while the monthly hike in diesel rates was put off. The reduction will be effective from 1st April midnight. The price of petrol was last increased by 60 paise on 1st March 2014.

On Monday, the benchmark RSS4 grade rubber closed at `.149 a kg at Kottayam. RSS3 grade closed at `.140.10 a kg at Bangkok and Malaysian SMR20 closed at `.115.24 a kg. On Tokyo Commodity Exchange, April 2014 futures series closed at ¥249.2 a kg, May at ¥248.7, June at ¥238, July at ¥234.8, August at ¥233.8 and the contract for delivery in September 2014 closed at ¥233.2 a kg and on Tuesday market will be in a positive mood. While on National Multi Commodity Exchange, April 2014 futures closed at `.146.77 a kg, May at `.150.75, June at `.154.06 and July at `.154.62 a kg.

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Will INR get competitive edge in current scenario?

Though rubber exports have been lower, Rubber Board's efforts to promote the brand Indian National Rubber (INR) in the international market has met with success, as 56% of the total exports have been INR brand. The poor quality of the rubber sheets supplied by the domestic producers has been one reason for the user industry to go for imports. The board is now keen to replicate the success story in the domestic market by launching a series of branded high quality sheets through a company promoted by it in Nilambur in Malappuram district in Kerala and the brands are expected to give a competitive edge in the market.

Today, a thirty one member delegation from Philippines Rubber Marketing Mission led by Sakiram A. Hajan, Dy. Minister of the Department of Trade & Industry visited Rubber Board to learn the activities of the Board in agricultural expansion, research and other areas. They also visited laboratories of the RRII and on their way back to Philippine, the delegation will visit All India Rubber Industries Association, Indian Rubber Manufacturers Research Association and few other rubber manufacturing units in Mumbai.

Latex prices are rising faster than rubber sheet due to drought in Southeast Asia, which in turn will help in cutting supplies. Buyers are accelerating purchases in anticipation of shortages during wintering. Rubber export prices from Thailand most probably will advance. Production in Thailand, Indonesia and Malaysia may drop because of exceptional dry weather.

On Monday, the benchmark RSS4 grade rubber closed at `.147.50 a kg at Kottayam. RSS3 grade closed at `.139.77 a kg at Bangkok and Malaysian SMR20 closed at `.117.24 a kg. On Tokyo Commodity Exchange, March 2014 futures series closed at ¥240.1 a kg, April at ¥242.2, May at ¥242.9, June at ¥235.3, July at ¥233.1, and the contract for delivery in August 2014 closed at ¥232 a kg. While on National Multi Commodity Exchange, April 2014 futures closed at `.146.51 a kg, May at `.149.89, June at `.152.27 and July at `.153.25 a kg.

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

Falling rubber price will be an issue

Kottayam Lok Sabha constituency election campaign is going on in full swing and soaring prices of essential commodities and fall in natural rubber price are some of the issues being highlighted. Kottayam is home to a large number of rubber growers and is also a primary trading centre of natural rubber. There will be tough fight between sitting MP & UDF candidate Jose K. Mani, and the LDF’s JDS nominee Mathew T. Thomas in the upcoming elections.

On 25th March 2014, Bureau of Indian Standards - Kerala region in association with the Rubber Board is organising a meeting of the BIS licensees of natural rubber processing units at Rubber Research Institute of India (RRII), Kottayam, to discuss ways of improving the certification process and the issues related to certification and quality of products.

On Friday, the benchmark RSS3 grade closed at `.140.20 a kg at Bangkok and Malaysian SMR20 closed at `.116.73 a kg, while RSS4 grade at Kottayam closed at `.147.50 a kg. On National Multi Commodity Exchange, April 2014 futures closed at `.144.36 a kg, May at `.147.37, June at `.149.85, July at `.149.97 and August at `.153.10 a kg. On Thursday, Tokyo Commodity Exchange March 2014 futures series closed at ¥245 a kg, April at ¥244.6, May at ¥244.2, June at ¥236.7, July at ¥235.3, and the contract for delivery in August 2014 closed at ¥234.7 a kg.

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Rubber4U

Rubber4U - 15th March 2014 issue

NR production down while import up

Last month the prices of tyre grade rubber fell to multi year lows in the international market due to economic slowdown and high levels of inventory in China and also weakness in Tocom rubber futures. Due to this scenario, India’s natural rubber imports in February 2014 doubled to 18,141 tonnes, compared to February 2013, while natural rubber production fell to 60,000 tonnes from 62,000 tonnes a year ago.

According to Association of Natural Rubber Producing Countries, natural rubber production increased 4.7% in 2013 among the 11 member countries of ANRPC. Production hit 11.2 million metric tons.

On Monday, RSS4 grade at Kottayam closed at `.146.50 a kg. Today, the benchmark RSS3 grade closed at `.136.07 a kg at Bangkok, while Malaysian SMR20 closed at `.115.88 a kg. Futures on the Tokyo Commodity Exchange, March 2014 futures series closed at ¥241.9 a kg, April at ¥240, May at ¥240.9, June at ¥237.6, July at ¥235.7, and the contract for delivery in August 2014 at ¥235 a kg. While on National Multi Commodity Exchange, March 2014 futures were trading at `.145.15 a kg, April at `.150.30, May at `.154 and June at `.155.01 a kg, at 13.35 IST.

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Market still in bear mood

Kerala government began its natural rubber procurement plan at `.2 more than the market price to raise the price to `.171 a kg. As international prices are at its low and local supply so tight that imports are likely to continue. The excise duty reduction announced in the interim budget has failed to trigger a boom in vehicle sales. Under this circumstance it will be difficult to increase the natural rubber prices to `.171 per kg in the short term.

Industry feels that 2.72 lakh tonnes of natural rubber stock projected by the Rubber Board at the end of January 2014 is an overestimated. According to the industry, it should be 30,000 to 40,000 tonnes lower.

On Saturday, RSS4 grade at Kottayam closed at `.147 a kg, while National Multi Commodity Exchange, March 2014 futures closed at `.144.65 a kg, April at `.149.66, May at `.152.67 and June at `.154.70 a kg. On Friday, the benchmark RSS3 grade closed at `.137.74 a kg at Bangkok, while Malaysian SMR20 closed at `.119.83 a kg. On Friday, Futures on the Tokyo Commodity Exchange, March 2014 futures series closed at ¥236 a kg, April at ¥236, May at ¥237.7, June at ¥234.3, July at ¥231.9, and the contract for delivery in August 2014 closed at ¥231.2 a kg. On Monday the most active contract for August may touch ¥222 a kg.

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

Read lot more in Rubber4U – 15th March 2014 issue

Vietnam becomes third largest NR producer

According to the Association of Natural Rubber Producing Countries (ANRPC), among the top 9 producers, India has slipped down to fifth spot in production of natural rubber, in 2013. In 2012, India was on the fourth place after Thailand, Indonesia and Malaysia. India's position could have been much weaker, but a sharp fall in Malaysian natural rubber production saved India to stay at the fifth position. The natural rubber productivity of India, which was 1867 kg/Ha in 2008-09 has been reckoned at 1813 kg/Ha for 2012-13.

Today, the benchmark RSS4 grade rubber closed at `.148.50 a kg at Kottayam, while RSS3 grade closed at `.136.10 a kg at Bangkok and Malaysian SMR20 closed at `.116.26 a kg. On Tokyo Commodity Exchange, March 2014 futures series closed at ¥223.1 a kg, April at ¥224.3, May at ¥226.8, June at ¥226.8, July at ¥225.3 and the contract for delivery in August 2014 closed at ¥224.7 a kg. On National Multi Commodity Exchange, March 2014 futures closed at `.147.10 a kg, April at `.151.23, May at `.154.11, and June at `.155.91 a kg.

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