The price of rubber in Dakshina Kannada and Udupi markets touched Rs. 139.50 a kg on Monday, the highest this year.

It reached Rs. 140 a kg in August 2008, but started declining after three days to reach Rs. 70 a kg, Sridhar G. Bhide, president of the Karnataka Rubber Belegarara Hitarakshana Vedike based at Ujire in Dakshina Kannada told The Hindu.

Mr. Bhide said that the rubber price had jumped by Rs. 5.50 a kg in the past week. It was priced at Rs. 134 a kg last Monday. The quality-grade rubber is known as ribbed smoked sheet (RSS) grade IV.

The price of low-grade rubber, known as RSS lot, went up by Rs. 6 a kg in a week’s time to Rs. 130 a kg on Monday. This grade of rubber fetched Rs. 124 a kg week ago, he said.

Mr. Bhide attributed the rise to the futures market. “I do not see any other reason for the steep hike in price this year. It is the impact of ‘satta bazaar’ (futures) trading,” he said.

The price of quality rubber in the international market stood at Rs. 132 a kg, he added.

Mr. Bhide, who is also president of Belthangady Taluk Rubber Growers’ Marketing and Processing Cooperative Ltd., said that the society procured rubber from growers and cooperative societies in the State. In all, 300 companies, including tyre companies, procure rubber from the Belthangady society. “Tyre companies have stopped procuring rubber from the society for the past two weeks owing to the steep increase in price. There is no physical trading from these companies. I have learnt that physical procurement from tyre companies in other parts of the country has also come down. Hence, the hike in price is nothing but a reflection of the impact of futures trading,” he said.

However, a senior official of the Rubber Board at Kottayam, Kerala, who did not want to be named, told The Hindu that rubber procurement from China had increased. As a result, the price in international market had gone up.

Considering the steep increase in the price, Radhakrishna Hebbar, a major rubber grower at Neriya in Belthangady taluk, said that he was worried. “I do not think the price will be sustained. It is like the share market. It reminds me of the vanilla price three years ago, which went up steeply and fell subsequently,” he said.

Mr. Bhide said the society’s procurement accounted for one per cent of the rubber produced in the country.