Rubber prices climbs back

Thai government claimed it sold half the country's rubber stockpile, which is about 1.6% of annual global rubber production. Thai government officials said they are in talks with three potential buyers over selling the rest of the stockpile.

Soft loans and cheap fertilizer to farmers is not enough, hence, Thailand rubber growers demand stockpile sale probe and threaten protests. But the government panel agreed today to expedite subsidy payments to rubber farmers in exchange for them dropping planned street protests. The subsides constitute the last 10% of a 30 billion baht package approved earlier to aid farmers, who have been hit hard by tumbling rubber prices. Thailand's huge stockpile of rubber has pushed down prices and the industry needs reform if the market is to rebound.

The Kerala plantation industry has taken strong exception of the government’s decision to enhance plantation tax by 100% and land tax by 150%, at a time when the industry is going through a tough time. The move would affect the industry badly, as the prices of rubber have been falling drastically. Gilbert Dsouza, president of Association of Planters of Kerala said there is a mismatch between the high cost of production and price realization and this has created a serious cash flow position to the plantation industry.

Major rubber consumers continued to stay away from the domestic market, while rubber prices managed to regain strength on covering purchases at lower levels.

The benchmark RSS4 grade rubber closed at `.124 a kg at Kottayam, while RSS3 grade closed at `.100.73 a kg at Bangkok and Malaysian SMR20 closed at `.93.32 a kg. On National Multi Commodity Exchange October 2014 futures closed at `.120.61 a kg, November at `.120.44, December at `.120.52 and January 2015 closed at `.121.08 a kg. On Tokyo Commodity Exchange, September 2014 futures series closed at ¥176 a kg, October at ¥178.6, November at ¥181.6, December at ¥185.2, January 2015 at ¥187.6 and the contract for delivery in February 2015 closed at ¥189.2 a kg.

Read lot more in Rubber4U – 1st October 2014 issue

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