Natural rubber prices are likely to stay firm in spite of a recovery in production, traders said. Physical availability of the commodity is still in short supply while consumption has moved up marginally. According to provisional estimates of the Rubber Board, rubber output is lower by 6% in August compared with same period a year ago.
Production has recovered from the sharp drop of 39% in July. The trend in output in August can be taken as a signal of rubber production recovering from the viral fever and heavy rains in the growing areas.
Rubber production is likely to regain in the coming days in the south and central Kerala, while it is likely to drop in northern parts of the state as the occurrence of fever has moved on the north, Cochin Rubber Merchants Association president N Radhakrishnan told FE.
He believes that the effect of the shortfall in production during July is likely to linger in the short term. Fall in output in July by 25,500 tonne has brought down overall output in first five months of current fiscal compared with previous year, he said.
However, Rubber Board officials are hopeful that the sector will recoup the losses in the coming days. During April-August 2007-08 rubber output fell down by 18% to 2,53,630 tonne as against 3,08,660 tonne in same period a year ago.
Natural rubber consumption however rose by 2.34% to 342,240 tonne in April-August compared with 3,34,400 tonne in same period a year ago.
Rubber imports into the nation increased by 25% to 33,422 tonne compared with 26,647 tonne in same period. Export of natural rubber however, slipped by 64% to 14,823 tonne compared with 41,335 tonne in the period.
