Fall in crude oil prices spells bad news for natural
rubber growers. With Brent crude oil prices plunging to a four-year (has fallen
to US$80 per barrel), natural rubber prices, too, are set to come under
pressure, because as crude prices drop, the rates of synthetic rubber will also
drop. Consumption of synthetic rubber in India has increased in the first
quarter of 2014-15 to 58.9% against 57.6% last year.
The government should encourage rubber
replantation and offer rubber growers subsidies to plant new trees. Automotive
Tyre Manufacturers’ Association wants these measures implemented in order to
address the reluctance of growers to plant new trees, which can’t be tapped for
their first six to seven years. Without encouragement, the ATMA fears growers
will continue to tap older lower yielding trees.
According to a Kerala state government
official, state will buy rubber at `.5 per kg more than
prevailing market price from farmers and the cabinet has decided to buy rubber
through state-run agencies. Kerala chief minister Oommen Chandy demanded a
total ban on rubber imports, besides seeking imposition of higher duty rates on
synthetic, sheet and block rubber and other rubber products.
The Indian government has fixed new gas price
at US$5.61 per million british thermal unit, increased from US$4.2 per million
british thermal unit earlier, while it has reduced diesel price in Delhi by `.3.37
per litre following sharp fall in crude oil prices in international markets.
This new gas price hike will be effective from 1st November, while the diesel
price cut will be effective from today midnight.
Rubber prices, however, improved in Asian
market as China came up with better trade data and on talks of producers in
South-East Asia planning supply curbs. According to the latest data, benchmark
RSS4 grade rubber closed at `.123 a kg at
Kottayam, while RSS3 grade closed at `.99.58 a kg at
Bangkok and Malaysian SMR20 closed at `.92.16 a kg. On
National Multi Commodity Exchange November 2014 futures closed at `.122.71
a kg, December at `.121.52, January 2015 at `.122.25, February at `.121.20,
March at `.121.80 and April at `.122 a kg. Tokyo
Commodity Exchange, October 2014 futures series closed at ¥178.2 a kg, November
at ¥181.5, December at ¥182.6, January 2015 at ¥185.6, February at ¥188.5 and
the contract for delivery in March 2015 closed at ¥189 a kg.
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