Natural rubber prices at record high

Natural rubber (NR) prices reached Rs 220 a kg on strong global cues coupled with high demand across the world. This is the first time that the local market crossed the Rs 220-a-kg mark. In Bangkok, prices were Rs 25 higher that the Indian counters at Rs 245 a kg.

The nourishing global market along with reports of low production and rising crude prices led to hoarding by growers. Futures counters also indicate a much stronger market in March and April, as prices may reach Rs 240 a kg. So, according to local traders the market would remain bullish for the next couple of months and prices may cross Rs 250 a kg.

The huge gap in the domestic and global trading prices favours exports and indications are now bright for a rise in exports in the coming months. The rubber-based industries, especially the tyre industry are now facing a serious crisis as imports are not viable even at a reduced duty of 7.5 per cent. To their dismay, supply in the local market is meagre and whatever comes to the market is being absorbed immediately.

It is really a growers paradise now. As the main season in production comes to a halt by the end of this month, growers are reluctant to immediately sell their stock. They are holding stock so as to fetch maximum price as the prices are rising daily. This affects the supply and the rubber-based units are worse hit. Even at higher prices, they are not able to keep the inventory steady.

The demand for the commodity is rising sharply globally. Apart from India and China, demand is on a rise in the US and Japanese markets too.

Growers said production would continue during the summer also due to the high prices. Therefore, fall in production during the offseason is not expected this time. Meanwhile, the stock in the market is rather weak and it is not conducive with the Rubber Board estimates. The Board estimated a stock of 261,000 tonnes, but market sources said the actual available stock would be below 100,000 tonnes.