India rubber price surges 17 per cent

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Published: June 12, 2019 12:43:14 AM

The price of premium grade RSS-4 sheet has touched Rs 150 per kilo for the first time in the past two years, though the supply situation may not allow a matching market realisation.

India rubber price surges 17 per cent India rubber price surges 17 per cent

It seems rubber growers have got their moment in the sun, as the Indian price of natural rubber (NR) jumped 17% in 45 days. The price of premium grade RSS-4 sheet has touched Rs 150 per kilo for the first time in the past two years, though the supply situation may not allow a matching market realisation.

“The last time we saw the `150 per kilo price for RSS-4 in Kottayam market was March 21, 2017. It was just `128 per kilo in last week of April. Price has been shooting up faster than our best expectations,” Siby Monipally, secretary, Indian Rubber Growers Association (IRGA), told FE.

Rubber contracts for December in TOCOM were slightly lower at `13,122 per 100 kg last week. Meanwhile, June contract — the busiest in ICEX rubber futures — has fetched `15,842 per 100 kg on Monday, with nearly 4% weekly surge.

One reason for the domestic price surge is that the tyre firms have realised that factoring in the landing costs, importing NR currently could hurt them by at least `170 per kilo. But, then, May has been a lean season and carry-over stocks are limited. Last year, due to the humongous August floods in Kerala and the subsequent massive outbreak of abnormal leaf fall disease, NR production was 6.6% lower than that in the previous fiscal. By Rubber Board’s provisional estimates, the production in 2018-2019 was 648,000 tonne, against 694,000 tonne in 2017-2018.

Rajiv Budhraja, director-general, Automotive Tyre Manufacturers Association, had expressed anxiety at nearly 48% dependency on NR imports, while India is an active rubber-producing country. As the monsoon set in this week, the tapping activity in rubber estates has slowed down.

Rubber Board chairman KN Raghavan has called upon farmers to set up rain guards and get cracking on tapping.

“However, the prolonged duration of low price realisation has been a vicious cycle for farmers. Often tapping the latex from the trees had not been worth the high wage costs,” said Josekutty Antony, president, Rubber Nursery Owners’ Association. Rubber farmers may take a while to recover their confidence and diligently engage in replantation of old and ailing trees.

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