Prices of natural rubber are likely to remain steady at around Rs 137 per kg to Rs 138 per kg ahead of commencement of the main tapping season which begins in September, traders and market participants said.
Rubber prices had recently dropped marginally by Rs 1.50 per kg due to stock liquidation by farmers ahead of the Onam festival in Kerala.
Experts feel that the prices could weaken further when full tapping commences after the festival which falls on September 12.
Meanwhile, tyre firms are keeping inventories sufficent only to meet daily requirements, due to high prices. Last week about 1,000 tonne traded hands. Dealers are said to have bought 3,500 tonne as buffer for the lean patch when stocks take a slowdown.
As sheet availability improves by mid-September, the price may soften, trader sources told FE. By then, the availability in international markets too is likely to ease. In the international market, the RSS-3 grade is selling at just Rs 124 per kilo. But this is not likely to translate to imports in a hurry, the sources added.
Rubber Board chairman Sajen Peter recently advised farmers to focus on value-addition of latex to sheets. While sheets enjoy insatiable demand, medical-glove manufacturers, who are the main consumers of liquid latex, are facing a downturn.
Factoring in the existing price of centrifuged latex, rubber-processing factories would be able to function without incurring loss only if they could buy field latex from growers and rubber producers societies (RPS) at a price less than Rs 25.