Rubber price down as oil prices falls

Sluggish growth and downward pressure on inflation due to sliding global oil prices prompted the Bank of Japan to unexpectedly expand its massive monetary stimulus last month. The world's third-largest economy, Japan had been forecast to rebound by 2.1%, but GDP fell at an annualized 1.6% pace in July-September 2014. Japan's economy unexpectedly slipped into recession in the third quarter.

Crude oil prices slipped below $75 for the first time in more than four years. Cheaper crude oil means lower prices for synthetic rubber and there is a possibility that natural rubber prices may fall to `.98 per kg level. Indian rubber growers have stopped the production to cut their losses. According to them current rubber prices are not high enough to cover the cost of labour used to harvest and process the commodity.

Following requests to Chinese government leaders to buy more agricultural products from Thailand, negotiations at the ministerial level are underway for Thailand to sell 2 million tonnes of rice and 200,000 tonnes of natural rubber to China on a government-to-government basis. Company representatives will arrive in Thailand on 19th November to discuss ways investment in the rubber industry in Thailand, while trade associations will discuss China's plan to boost its investment in Thailand.

Rubber producers in Asia are to meet this week to look at more measures to push up prices, which are not far above five-year lows, including restrictions on supply to global markets.

The benchmark RSS4 grade rubber closed at `.117 a kg at Kottayam, while RSS3 grade closed at `.100.17 a kg at Bangkok and Malaysian SMR20 closed at `.92.83 a kg. On National Multi Commodity Exchange December 2014 futures closed at `.115.35 a kg, January 2015 at `.115.55 and February at `.115.89 a kg. On Tokyo Commodity Exchange, November 2014 futures series closed at ¥187.6 a kg, December at ¥189.9, January 2015 at ¥193.5, February at ¥196.2, March at ¥198.9 and the contract for delivery in April 2015 closed at ¥200.2 a kg.

For reading Rubber4U – 15^th November 2014 issue: http://rubber4u.com/Public/Abcd.pdf

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