Wednesday, August 27, 2014

Sale of rubber stockpiles delayed


The National Council for Peace and Order is likely to delay the sale of 210,000 tonnes of rubber in stockpiles. The sale would not go ahead without measures in place to ensure prices remain stable.

To comply with a Supreme Court ruling, the finance minister passed a regulation that applied the 10% VAT to 14 agricultural products, including rubber. The Indonesian national alliance of rubber producers has rejected the imposition of 10% value-added-tax, which would disrupt its production and exports. The measure comes at the wrong time when farmers are struggling against falling rubber prices. The situation could worsen whenever rubber prices gained as farmers would have to pay a higher tax.

The tyre manufacturers are reaping the benefit of falling rubber prices. While with the revival in auto demand tyre makers will have the advantage of both lower raw material price and growth in sales volume. Replacement market already giving a good business, the outlook for the industry is healthy.

As expected, Tokyo Commodity Exchange, August 2014 futures series closed at ¥188.2 a kg, September at ¥190.1, October at ¥193, November at ¥196.1, December at ¥198.4 and the contract for delivery in January 2015 closed at ¥200.1 a kg. On National Multi Commodity Exchange September 2014 futures were trading at `.127 a kg, October at `.126.15, November at `.126 and December at `.126.90 a kg, at 12.10 IST.

For 2014-15 Rubber Forecast, http://rubber4u.com/Public/RForecast.pdf

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