The global economy is experiencing serious
disruption. U.S WTI benchmark crude oil prices fell by 20% in July, the biggest
monthly fall since October 2008, while Brent crude oil prices, the
international benchmark, fell by 18%, the biggest monthly fall since December 2014.
The collapse in crude oil prices has now adversely affected coal as well. India’s
macroeconomic situation, however, is better. Low oil prices have greatly
moderated inflation, though many items of daily consumption are experiencing
price rise.
Inflation measured by the wholesale price
index inflation (WPI) has remained negative for the past eight consecutive
months and stood firm at negative 2.4% in June. The consumer price index (CPI)
remained lower than RBI’s guided path target of 6%. RBI in its second bimonthly
monetary policy in June had cut policy (repo) rates by 25 basis points, the third
bimonthly credit policy review scheduled for 4th August and one has to wait and
see whether there will be a rate cut or not. Since the economy is weak, we
expect repo rate to be unchanged. RBI would rather hold the rates and wait for
the next policy because there is no clarity.
The benchmark RSS4 grade rubber closed at `.120
a kg at Kottayam, while RSS3 grade closed at `.101.26 a kg at
Bangkok and Malaysian SMR20 closed at `.87.56 a kg. On
National Multi Commodity Exchange August 2015 futures closed at `.118.15
a kg, September at `.118.05 and October at `.117.51 a kg. On
Tokyo Commodity Exchange, August 2015 futures series closed at ¥186.7 a kg,
September at ¥189.5, October at ¥191.7, November at ¥193.4, December 2015 at ¥195.3
and the contract for delivery in January 2016 closed at ¥197.4 a kg. On Tuesday,
most probably Tocom futures contract for delivery in January 2016 may trade in
the range of ¥192 & ¥198 a kg.
To read Rubber4U – 1st August
2015 issue: http://rubber4u.com/Public/Abcd.pdf
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