Weakness continues

India's factory growth showed no sign of acceleration last month as lukewarm demand restrained output even as price pressures eased. The momentum in the manufacturing sector held broadly steady, with domestic demand countering a slowdown in export orders. Both input and output prices rose at their slowest pace in about a year.

At a meeting of industry leaders with Amitabh Kant, the new Secretary of Department of Industrial Policy and Promotion, the industry has demanded for a comprehensive national rubber policy on the lines of auto sector policy, as it touches the lives of over 10 lakh growers and has a rich and diverse value chain encompassing tyres, conveyer belts, auto components, footwear, medical supplies, sports equipment, etc. The issue has been raised just before the stakeholders’ consultations at the Rubber Board’s headquarters in Kottayam on 9th May. The policy is already under consideration by the Commerce Ministry.

The Reserve Bank of India left rates on hold at 8% last month. Auto volumes are unlikely to grow in double digits during 2014-15, even if a stable government comes to power, as consumer sentiment remains weak and a pick-up is not likely in the near term.

The Thailand Agriculture and Cooperatives Ministry will sell 220,000 tonnes of stockpiled rubber.  It was costing around 20 million baht a month to store the stockpile. As there is no rubber output in the market at this time, it is necessary for the government to release the stockpile as soon as possible, before the new harvest season starts later this month. Rubber price was still in downward trend, the stockpile would deteriorate if kept too long and this would affect the market price.

Today, the benchmark RSS4 grade rubber closed at `.138.50 a kg at Kottayam. RSS3 grade closed at `.120.79 a kg at Bangkok and Malaysian SMR20 closed at `.100.69 a kg. On Tokyo Commodity Exchange, May 2014 futures series closed at ¥198.1 a kg, June at ¥199.6, July at ¥200, August at ¥200.1, September at ¥200.5, and the contract for delivery in October 2014 closed at ¥199.3 a kg. On National Multi Commodity Exchange, May 2014 futures were trading at `.135.80 a kg, June at `.139.75, July at `.141, August at `.140.90 and September at `.139.97 a kg, at 15.50 IST.

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

Read lot more in Rubber4U – 15th May 2014 issue