Rubber prices slip on likely rise in supply

The downward trend in rubber prices during the past few days might continue on expectations of a rise in supply as well as thin demand from exporters, dealers said. If the current trend prevailed, the benchmark RSS-4 grade could slip to Rs 100-105 a kg from the current levels of Rs 107, they said.

Revival of exports, however, could check the downward momentum in rubber prices. Domestic rubber prices slipping below overseas rates could spur demand from exporters, they said. On Friday, RSS-3 grade in Singapore at Rs 110.16 was higher compared with Rs 107 for its equivalent RSS-4 grade here, dealers said. If the gap between overseas and domestic rates widens to the level of Rs 10 a kg, demand from exporters would pick up, they added.

Supply rise 
Although overall rubber output fell 13 per cent on year to 273,525 tonnes in April-August, the supply levels started moving up from this month, dealers said.

Average arrivals in the key spot trading hub such as Kottayam had moved up to 700 tonnes a day during the last three-four days compared with 300 tonnes few weeks ago, said Kochumon, a dealer based in Kottayam. Weakened rains in growing areas in Kerala and growers releasing stocks, held back due to beginning of peak output season, also prompted easing of supplies, he said. Lull in rain is expected to improve fresh crop supply due to increase in the number of tapping days.

Rubber import reaching a record high of over 90,000 tonnes in first four months of the current financial year has also ensued adequate stocks with manufacturing industry, dealers said.