Non-tyre rubber product trade deficit on the rise

Thailand’s Ministry of Agriculture and Agricultural Cooperatives will ask the Natural Rubber Policy Committee for 30 billion baht budget to increase the utilisation of natural rubber from 10% to 30% of four million tonnes of annual production. On the other hand Thailand’s military government will encourage farmers to cut down more rubber trees in a bid to restrict supply to help shore up rubber prices. Rubber exports from Thailand rose 9.8% to 1.7 million tonnes during January-June 2014.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose by 196 tonnes to 15570 tonnes. While natural rubber inventories in Qingdao-China, dropped to 214,300 mt from 239,000 mt as of 31st July, according to Qingdao International Rubber Exchange Market.

According to Indonesian Agricultural Ministry, country’s natural rubber production is seen at 3.2 million tonnes in 2014 compared to 3.1 million tonnes produced last year.

India’s natural rubber imports during January-June 2014 rose 58% to 1.61 lakh tonnes, while imports in July rose 14.8% to 36,997 tonnes compared to July 2013. India’s three major Trade Agreements with Association of South-East Asian Nations (ASEAN), Korea and Japan have led to trade deficit in non-tyre rubber products, which has gone up 165% from `.651 crore in 2008-09 to `.1725 crore in 2012-13. While overall import of rubber products has gone up 100% from `.3810 crore in 2009-10 to `.7608 crore in 2012-13.

Today, the benchmark RSS4 grade rubber closed at `.137 a kg at Kottayam, while RSS3 grade closed at `.119.67 a kg at Bangkok and Malaysian SMR20 closed at `.103.50 a kg. On National Multi Commodity Exchange August 2014 futures closed at `.135.25 a kg, September at `.133.84, October at `.132.81 and November at `.133.47 a kg. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥192.2 a kg, September at ¥195.8, October at ¥198, November at ¥200.8, December at ¥203.8 and the contract for delivery in January 2015 closed at ¥205.9 a kg. Tommorrow, the most active January 2015 contract may trade in red and there is a possibility of price going below ¥204 a kg mark.

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Read lot more in Rubber4U – 15th August 2014 issue