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| Natural rubber hits a month's high |
| George Joseph / Kochi Aug 05, 2009, 00:56 IST |
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The domestic rubber market has seen a sudden rise in price due to heavy offtake by China, world’s largest consumer of natural rubber (NR). The price reached Rs 101 a kg, the highest in a month, for the benchmark grade RSS-4 on Tuesday.
The market is moving in tandem with the international market as the global price of RSS-3 grade touched Rs 95.50 a kg.
The gap between domestic and international prices is narrowing day by day. Almost a month ago, the Indian price tag was higher by around Rs 17 a kg which paved the way for more imports.
By mid-June, 51,000 tonnes were imported against 21,259 tonnes during April-June 2008-09. The projection of a 2.3 per cent drop in the global output of NR in the current year is also having a psychological impact on the price line. Although there has been no significant drop in production, the tapping of rubber trees and processing have been hit marginally in most of the producing countries including India, Vietnam and Thailand due to the monsoon. In Kerala, shortage of labourers is primarily affecting tapping and processing, decreasing the supply of rubber to major markets such as Kochi and Kottayam.
The current price is almost on a par with the yearly average price of 2008-09 which was Rs 101.12 a kg. But in August last year, prices had touched Rs 142 a kg, due to the abnormal spurt in crude oil prices.
According to leading Kochi-based dealers, the market would be dearer for a short while as the production season was on the anvil. The season would commence by the middle of September and around 45 per cent of the total annual production takes place during October-December. Unless there is a sustained growth in demand in countries such as China, US, India, Japan and Korea, the bull phase might fizzle out by next month.
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