Rubber prices nosedives

The economic slowdown in China followed by sluggish demand, high inventory level, oversupply of natural rubber and drop in the price of synthetic rubber has favoured for a further drop in the price of natural rubber. This trend indicates the poor off take by major consuming countries, hence a prolonged low price regime can be expected.

The United Planters’ Association of Southern India has expressed concern over the declining prices of natural rubber and sought the Centre’s help in resolving the crisis. The prices of RSS-4 grade natural rubber have fallen to `.122 a kg, compared to `.181 a kg as on 23rd September 2013, due to its unrestricted import. Many small growers have stopped tapping operations.

While rubber goods manufacturing industries have expressed concern over the disparity in rubber stock figures. In a communication to the Additional Secretary (Plantations), who is also the Chairman of the Expert Committee to draft the National Rubber Policy, the industry said rubber stock figures at the end of August as released by the Rubber Board show a discrepancy of approximately one lakh tonnes. According to the industry, based on the opening stocks of rubber in April and factoring the key parameters of production, consumption, import and export, the closing stock ought to have been 2.85 lakh tonnes at the end of August. The discrepancy of one lakh tonnes is huge and has significant consequences for all stakeholders.

Natural rubber prices nosedived in various global markets today on account of poor demand and oversupply of the commodity. The benchmark RSS4 grade rubber closed at `.122 a kg at Kottayam, while RSS3 grade closed at `.97.26 a kg at Bangkok and Malaysian SMR20 closed at `.88.84 a kg. On National Multi Commodity Exchange October 2014 futures were trading at `.117.74 a kg, November at `.117.50, December at `.117.79 and January 2015 at `.117.90 a kg, at 16.00 IST. On Tokyo Commodity Exchange, September 2014 futures series closed at ¥168 a kg, October at ¥172.2, November at ¥175.2, December at ¥178.5, January 2015 at ¥181.7 and the contract for delivery in February 2015 closed at ¥183.5 a kg.

Read lot more in Rubber4U – 1st October 2014 issue

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