Traders say fall in rubber price to cause Rs 70 cr loss

The unprecedented fall in rubber spot prices during the last two weeks will lead to 7,000 rubber traders in Kerala losing a total sum of around Rs 70 crore, N Radhakrishnan, president, Cochin Rubber Merchants Association, said on Tuesday.

Most traders are compelled to sell their rubber stock at much lower rates as prices have slumped, he said.

Benchmark RSS-4 grade rubber shed around 33 per cent at Rs 95 per 1 kg on Tuesday, from a high of Rs 142 a month ago, he said.

“The price crash will become unbearable for most dealers because the average margin in rubber trade is just 0.50-1.00 per cent per 1 kg.”

“When prices slip by Rs 5-10 per 1 kg, such low margins become meaningless”, Radhakrishnan said.

Prices fell by Rs 18 per 1 kg over the last three working days, he added.

“Such unprecedented fall due to repercussions in international commodity and finance markets have put many rubber dealers in disarray. The user industries are either cancelling orders or absenting themselves,” he said.

The situation is so severe that a dealer who bought Indian standard natural rubber at Rs 127,000 per 1 tonne two weeks ago sold the same at Rs 90,000 on Tuesday, suffering a loss of Rs 37,000, he said.