Bull run for rubber, prices may cross Rs 75/kg

Demand for rubber has outstripped supply, putting Natural rubber [NR] market in the bull orbit.

The per kilo price of RSS 4 grade has increased to the level of Rs 60.75 here. The highest price ever recorded is Rs 67 and industry sources said that prices may cross Rs 75 by July - August this year.

Prices of other grades also increased at Rs 59 -59.50 for ungraded sheet rubber and Rs 58.50 for ISNR-20.

The supply of rubber is not able to keep pace with the demand and thus this shortage has resulted in the prices shooting up.

Market sources said the state of things were all set to help rubber enter a bull phase as they didn't see production increasing in the near future.

According to estimates of the growers, production was lower by 10 - 15 per cent during March and April than the same months last year due to the hot weather.

Stockists told Business Standard that good quality sheet rubber was not available in the market and the demand from the industry was very high.

The hectic activity in the rubber futures market also caused an increase in the price as a large chunk of stock is lying in the warehouses for meeting the commitments in June, July and August contracts.

Though global rubber prices are lower by Rs 4 per Kg than those in the Indian market, duty-bound import is still not a profitable option for the industry.

However, traders said that import through advance license scheme is active and around 6,000 tonne of rubber is being imported every month.

Carryover stock is also very low in the market due to increased exports during the last two years.

Thus, all the parameters in the natural rubber (NR) market at present are favourable for a bull run and the price may touch even Rs 80 per kg.

Increased demand for natural rubber world over also fuelled the demand and this also signals a good time for rubber growers in India and especially, Kerala.

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Streching the limits

• The per kilo price of RSS 4 grade has increased to the level of Rs 60.75 here
• Prices of other grades also increased at Rs 59 -59.50 for ungraded sheet rubber and Rs 58.50 for ISNR-20
• Industry sources said that prices may cross Rs 75 by July-August and may touch even Rs 80/kg