Non-tyre rubber product trade deficit on the rise

Thailand’s Ministry of Agriculture and Agricultural Cooperatives will ask the Natural Rubber Policy Committee for 30 billion baht budget to increase the utilisation of natural rubber from 10% to 30% of four million tonnes of annual production. On the other hand Thailand’s military government will encourage farmers to cut down more rubber trees in a bid to restrict supply to help shore up rubber prices. Rubber exports from Thailand rose 9.8% to 1.7 million tonnes during January-June 2014.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose by 196 tonnes to 15570 tonnes. While natural rubber inventories in Qingdao-China, dropped to 214,300 mt from 239,000 mt as of 31st July, according to Qingdao International Rubber Exchange Market.

According to Indonesian Agricultural Ministry, country’s natural rubber production is seen at 3.2 million tonnes in 2014 compared to 3.1 million tonnes produced last year.

India’s natural rubber imports during January-June 2014 rose 58% to 1.61 lakh tonnes, while imports in July rose 14.8% to 36,997 tonnes compared to July 2013. India’s three major Trade Agreements with Association of South-East Asian Nations (ASEAN), Korea and Japan have led to trade deficit in non-tyre rubber products, which has gone up 165% from `.651 crore in 2008-09 to `.1725 crore in 2012-13. While overall import of rubber products has gone up 100% from `.3810 crore in 2009-10 to `.7608 crore in 2012-13.

Today, the benchmark RSS4 grade rubber closed at `.137 a kg at Kottayam, while RSS3 grade closed at `.119.67 a kg at Bangkok and Malaysian SMR20 closed at `.103.50 a kg. On National Multi Commodity Exchange August 2014 futures closed at `.135.25 a kg, September at `.133.84, October at `.132.81 and November at `.133.47 a kg. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥192.2 a kg, September at ¥195.8, October at ¥198, November at ¥200.8, December at ¥203.8 and the contract for delivery in January 2015 closed at ¥205.9 a kg. Tommorrow, the most active January 2015 contract may trade in red and there is a possibility of price going below ¥204 a kg mark.

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Repo rate unchanged

Reserve Bank of India kept its key policy repo rate unchanged at 8% as expected, but warned about inflationary risks if there is a shortfall in monsoon rains. It reduced banks minimum bond holding requirements, known as the statutory liquidity ratio, by half a percentage point to 22% to free up more money for lending, effective from 9th August 2014.

Today, RSS3 grade closed at `.119.68 a kg at Bangkok and Malaysian SMR20 closed at `.103.46 a kg, on Friday. On National Multi Commodity Exchange August 2014 futures were trading at `.138.50 a kg, September at `.136.36, October at `.135.99 and November at `.135.70 a kg, at 12.35 IST. On Tokyo Commodity Exchange, August 2014 futures series closed at ¥192 a kg, September at ¥194.9, October at ¥196.9, November at ¥199.5, December at ¥202.5 and the contract for delivery in January 2015 closed at ¥204.6 a kg.

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Petrol slashed, diesel hiked

Oil marketing companies today reduced retail petrol prices by `.1.09 a litre and increase retail diesel price by 56 paise a litre with effect from 31st July midnight. After revision, petrol will be sold at `.72.51 per litre in Delhi, `.80.30 a litre in Kolkata, `.80.60 in Mumbai and `.75.78 per litre in Chennai. Diesel will be sold at `.50.40 in Delhi, `.63.22 per litre in Kolkata, `.66.63 per litre in Mumbai and `.62.30 per litre in Chennai.

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Rubber4U

Rubber4U - 1st August 2014 Issue

Anti-dumping duty on Rubber Chemicals

Seeks to impose definitive anti dumping duty on imports of Rubber Chemicals originating in or exported from China PR and Korea. More details on: http://rubber4u.com/Public/Arc.pdf

Today, the benchmark RSS4 grade rubber closed at `.137 a kg at Kottayam, while RSS3 grade closed at `.119.33 a kg at Bangkok and Malaysian SMR20 closed at `.101.43 a kg, on Friday. On National Multi Commodity Exchange August 2014 closed at `.137.10 a kg, September at `.134.51, October at `.133.83 and November closed at `.134.67 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥194 a kg, August at ¥193.6, September at ¥196.3, October at ¥199, November at ¥201.7 and the contract for delivery in December 2014 closed at ¥203.8 a kg.

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IRGA urges Centre to temporarily suspend import

Worried by the prolonged bearish trend in domestic prices of natural rubber, Indian Rubber Growers Association (IRGA) has urged the commerce minister to temporarily suspend import of natural rubber under the advance licence till domestic prices recover.

The rubber farming community has urged the Centre to increase import duty on all finished rubber goods to 8%. IRGA has requested the ministry to revisit the norms for duty-free import of natural rubber. Import duty on natural rubber should be increased up to 40%.

The benchmark RSS4 grade rubber closed at `.140 a kg at Kottayam, while RSS3 grade closed at `.122.26 a kg at Bangkok and Malaysian SMR20 closed at `.102.56 a kg. On National Multi Commodity Exchange August 2014 closed at `.139.80 a kg, September at `.137.70 and October closed at `.137 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥189.8 a kg, August at ¥192.9, September at ¥195.9, October at ¥198.2, November at ¥200.6 and the contract for delivery in December 2014 closed at ¥202.2 a kg. On Tuesday the market is expected to trade in red and it is expected that most active contract December 2014 series may touch a low of ¥199 a kg tag.

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Govt to take steps to boost production

India’s foreign exchange reserves rose to a near-all-time high to $317.037 billion, as central bank accumulated dollars to prevent volatility in the forex market.

Government has taken measures to boost the production and export of plantation crops through the Plantation Commodity Boards which provide financial and technical assistance to the growers and the industry.

Finance Minister Arun Jaitley said the schemes to promote export of plantation crops envisage providing assistance for participation in trade fairs, exhibitions, buyer-seller meets, brand promotion, public campaigns and export of value added products.

Natural rubber is not exported in large quantity as India's consumption of rubber is larger than domestic production.

Kerala Finance Minister K M Mani said `.10 crore have been earmarked for rubber procurement in a bid to help farmers who were reeling under crisis due to sharp fall in rubber prices.

Mani agreed with P C George, government Chief Whip’s demand to procure rubber by paying `.5 per kg more than the daily domestic market price of rubber. Agriculture Minister K P Mohanan said a meeting would be convened in consultation with Kerala Chief Minister Oommen Chandy to take a decision on the revised procurement price.

Imports of natural rubber surged due to the price difference in the domestic and international markets, and this trend is likely to continue for the next few months as the tapping of rubber is very low. The imports may match a record this year as rising car sales boost demand for tyres.

Rising natural rubber imports put further downward pressure on domestic rubber prices amidst weak demand. RSS4 grade rubber prices in 2011 was `.245 per kg is now at `.141 per kg. Weaker crude oil prices are also putting downward pressure on natural rubber as petroleum product synthetic rubber becomes more competitive.

The benchmark RSS4 grade rubber closed at `.141 a kg at Kottayam, while RSS3 grade closed at `.122.99 a kg at Bangkok and Malaysian SMR20 closed at `.102.12 a kg. On National Multi Commodity Exchange August 2014 closed at `.141.11 a kg, September at `.139.14, October at `.138.38, November at `.139.80, December at `.140.25 and January 2015 closed at `.141.35 a kg. On Tokyo Commodity Exchange, July 2014 futures series closed at ¥189.8 a kg, August at ¥192.9, September at ¥195.9, October at ¥198.2, November at ¥200.6 and the contract for delivery in December 2014 closed at ¥202.2 a kg.

For latest rate of Currency Exchange: www.rubber4u.com/Statistic/Notices

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Read lot more in Rubber4U – 1st August 2014 issue