Early advent of Wintering (low production period) in Thai rubber plantations has started leaving its price footprint on Indian rubber market. Export order books of rubber dealers, thus, bursting at the seams, price of India’s most traded variety RSS-4 has shot up to Rs 104 per kilo from Rs 101 per kilo last week.
Experts are of the view that, given the Rs 6 per kilo price gap between Bangkok rubber and Indian RSS-4, it is possible that the domestic price will graze higher price levels, “It may even scale Rs 110-111 per kilo with a matching tapping finale, if there is a shower or two in mid-Kerala this week to break the cold dry spell,” CT Krishnanan, vice-president (Commodities), Goejith Paribas told FE.
Beginning of the off-season and the crude price high affecting the synthetic rubber market are the other reasons for the buoy in the natural rubber (NR) market. However, in the last two to three weeks, the export orders from China and the US are higher putting upward pressure on domestic price, trade sources say. This is seen as an indication of diversion of international rubber sourcing from Thailand – world’s largest rubber exporter – to other rubber-producing countries.
Contradicting earlier apprehensions, Rubber Board chairman Sajen Peter had re-estimated notching up 50,000 tonne NR exports by March 31. During the current fiscal, 37,880 tonne were exported till February 19. Of this only 18,800 tonne were exported during December-February.
Even as ATMA (Automative Tyre Manufacturers Association) complained on the availability of rubber, it was relatively small and medium rubber-based industries, which were at Kochi and Kottayam bourses last week to build up their inventories. This, according to dealers, was because bigger players were importing at lesser costs, against their advance import liceses.
By a back-of-the-envelope trader estimate, the floating stocks are somewhere between 18,000 tonne and 20,000 tonne.
Against the 8.53 lakh tonne NR output last year, India is expected to see the fiscal-end with production of about 825 lakh tonne, according to Rubber Board.