Rubber hits record high

Written by Reuters | Mumbai | Updated: Jun 30 2010, 04:00am hrs
Indian rubber prices, which hit record highs on Monday, are likely to set new highs this week on a firm trend in the global market, good demand from domestic tyre makers and tight supplies owing to monsoon rains.

The supply situation is very tight. Growers are holding stocks anticipating further rise in prices, said N Radhakrishnan, a dealer and former president of Cochin Rubber Merchants Association.

The weather department is forecasting higher rainfall in July than June. If that comes true, then supply situation will become tighter next month.

India's south-west monsoon rains have stalled in many parts of the country in recent days, but India's biggest rubber producing state, Kerala has been getting good rains.

The benchmark July contract on the National Multi-Commodity Exchange (NMCE) provisionally closed down 0.8% at Rs 18,051 per 100 kg on Monday, after hitting a record high of Rs 18,300 earlier in the day.

Demand was good from tyre makers. But it may go down if prices rise further by another Rs 500, said an analyst at Kochi-based commodity brokerage.

The country's rubber production in May rose 2.9% to 54,600 tonne, while consumption jumped by 9.5% to 79,000 tonne, the Board said earlier this month.