Indonesia to propose rubber export restriction

According to a senior trade ministry official, Indonesia will propose implementation of the Agreed Export Tonnage Scheme (AETS) and expansion of rubber usage in construction at International Tripartite Rubber Council meeting in Bangkok during 21-22 February, to prop up prices for natural rubber.

After a prolonged delay, Indian Union Ministry of Commerce and Industry has finally prepared and released a draft National Rubber Policy. The draft is put up in the public domain in order to seek wider consultation and feedback/suggestions by 25th February 2019 from the stakeholders so as to provide final shape to the policy.

The benchmark RSS4 grade rubber closed at `.124.50 a kg at Kottayam, while RSS3 grade closed at `.118.36 a kg at Bangkok and Malaysian SMR20 closed at `.102.49 a kg. On ICEX, March 2019, the futures closed at `.127.01 a kg, April at `.130.15, May at `.126.91, June at `.128.17, July at `.129.45 and August closed at `.130.74 a kg. Tokyo Commodity Exchange February 2019 futures series closed at ¥193.5 a kg, March at ¥190.3, April at ¥192.1, May at ¥194.1, June at ¥195.5 and the contract for delivery in July 2019 closed at ¥197.5 a kg. On Thursday, most probably Tocom futures contract for delivery in July may trade in the range of ¥194 & ¥200 a kg.

To read Rubber4U – 1st March 2019 issue: http://rubber4u.com/Public/Abcd.pdf

Face Book: https://www.facebook.com/Rubber4U-1706372399645495/

For 2018-19 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Market to remain under pressure

The Reserve Bank of India has cut its key interest rate by a quarter of a point to 6.25%, in a bid to boost the economy. RBI has forecast GDP growth of 7.4% for 2019-20 with the first half growth expected to be in the range of 7.2-7.4% and 7.5% in the third quarter.

OPEC’s crude oil production in January was 30.98 million bpd, down by 890,000 bpd from December 2018, the largest monthly decline in the cartel’s production since January 2017 when the initial production cut deal began. OPEC’s Monthly Oil Market Report (MOMR) with production data for January is scheduled to be released next on 12th February.

The benchmark RSS4 grade rubber closed at `.123.50 a kg at Kottayam, while RSS3 grade closed at `.114.48 a kg at Bangkok and Malaysian SMR20 closed at `.95.66 a kg. On ICEX, February 2019, the futures closed at `.123.30 a kg, March at `.126.26, April at `.128.33, May at `.126.91, June at `.128.17 and July closed at `.129.45 a kg. Tokyo Commodity Exchange February 2019 futures series closed at ¥189.3 a kg, March at ¥182.3, April at ¥178.9, May at ¥178.9, June at ¥178.8 and the contract for delivery in July 2019 closed at ¥179.2 a kg. On Wednesday, most probably Tocom futures contract for delivery in July may trade in the range of ¥176 & ¥181 a kg.

To read Rubber4U – 15th February 2019 issue: http://rubber4u.com/Public/Abcd.pdf

Face Book: https://www.facebook.com/Rubber4U-1706372399645495/

For 2018-19 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Uncertain outlook but lots of expectations

Oil prices rose as investors expect US sanctions on Venezuela and production cuts effective January 2019, led by Organisation of the Petroleum Exporting Countries (OPEC) and its allies, to head off any glut, but closed in red. The global economic outlook and prospects for growth in fuel demand have been clouded by poor economic data in China and US-China trade tensions. Brent crude futures closed at $61.98 a barrel, while West Texas Intermediate crude closed at $53.16 a barrel.

The Reserve Bank of India’s Monetary Policy Committee (MPC) is scheduled to meet from 5 to 7th February for the sixth and final bi-monthly monetary policy review for 2018-19. In its last review, the MPC had kept the key lending rates unchanged. Retail inflation during the October-December quarter stood at 2.6% against RBI's projected trajectory of 3.8%. CPI inflation is expected to remain below the RBI's target of 4% in 2018-19. This gives room to change and RBI is expected to lower interest rates by 25 basis points. Finance Minister Piyush Goyal is scheduled to address customary post Budget meeting of the central board of Reserve Bank of India on 9th February and highlight the key points of interim Budget.

The Tokyo Commodity Exchange announced the first delivery of TSR20 Rubber since its listing on 9th October 2018. Forty of the February 2019 contracts were delivered totaling 200 tonnes.

The domestic prices of natural rubber in the key spot markets are likely to remain under pressure in the coming days due to bearish trend in the global market and subdued demand from domestic market.

The benchmark RSS4 grade rubber closed at `.123.50 a kg at Kottayam, while RSS3 grade closed at `.113.42 a kg at Bangkok and Malaysian SMR20 closed at `.95 a kg. On ICEX, February 2019, the futures closed at `.122.17 a kg, March at `.124.20, April at `.126.94, May at `.126.91, June at `.128.17 and July closed at `.129.45 a kg. Tokyo Commodity Exchange February 2019 futures series closed at ¥187 a kg, March at ¥184.3, April at ¥182.4, May at ¥180.2, June at ¥178.7 and the contract for delivery in July 2019 closed at ¥179.1 a kg. On Wednesday, most probably Tocom futures contract for delivery in July may trade in the range of ¥177 & ¥182 a kg.

To read Rubber4U – 15th February 2019 issue: http://rubber4u.com/Public/Abcd.pdf

Face Book: https://www.facebook.com/Rubber4U-1706372399645495/

For 2018-19 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Indian Union Budget 2019 Highlights:

On 1st February 2019, Finance Minister Piyush Goyal presented the Union Budget in Lok Sabha.

• Individual taxpayers with annual income up to `.5 lakh to get full tax rebate.
• Individuals with gross income up to `.6.5 lakh will not need to pay any tax if they make investments in provident funds and prescribed equities.
• Standard tax deduction for salaried persons raised from `.40,000 to `.50,000.
• TDS threshold on rental income raised from `.1.8 lakh to `.2.4 lakh.
• Gratuity limit increased from `.10 lakh to `.30 lakh.
•  Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to `.2 crore; can be exercised once in a lifetime.
• Benefits under Sec 80(i)BA being extended for one more year, for all housing projects approved till end of 2019-2020.
• Businesses with less than `.5 crore annual turnover, comprising over 90% of GST payers, will be allowed to return quarterly returns.
• 2% interest subvention on loan of 1 crore for GST registered MSME units.
• Within almost two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by tax officials.
• 2% interest subvention to farmers pursuing animal husbandry and fisheries.
• Mega Pension Yojana, namely Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of `.3000 per month, with contribution of `.100 per month, for workers in unorganised sector after 60 years of age.
• Under Pradhan Mantri Kisan Samman Nidhi, `.6000 per year for each farmer, in three installments, to be transferred directly to farmers' bank accounts, for farmers with less than 2 hectares land holding.

Fiscal deficit has been bought down to 3.4%; CAD (current account deficit) likely to be 2.5% of GDP this year.