Incessant rain hits production
Natural rubber prices have taken a sharp upturn owing to disruption of production following incessant rain, reaching a high of Rs.194 a kg for the Ribbed Smoked Sheet (RSS)-4 grade in the Kottayam and Kochi markets on Tuesday.
George Valy, president of the Indian Rubber Dealers' Federation, said Rs.194 was the weighted average and transactions had taken place at the rate of Rs.196 even on Tuesday.
Natural rubber prices which had touched Rs.180 a kg in July had come down to a more realistic Rs.160 by August after the declaration of the new import duty regime. The month of September saw the prices stabilise around the same level, the average for the month being Rs.166.45 a kg. Natural rubber production during the month recorded a rise of 4.3 per cent, a Rubber Board statement said.
However, with the rain extending into October, the prices started climbing. After a five-week gaining streak, they ended in an all-time high for the month — Rs.190 on October 30.
Natural rubber production during the month could be less by over 10 per cent than the earlier estimate, board sources said.
On Monday, prices continued to go north and reached Rs.192.
Mr. Valy said the traditional growing areas in Central Kerala had experienced relatively sunny weather in the past few days and tapping had resumed, but the Malabar region was still experiencing heavy rain.
Little natural rubber had reached the internal market, he said, pointing to possible hoarding by growers. “They are expecting the prices to breach the golden mark of Rs.200 a kg,” he said.
International prices too were showing a nominal recovery, with Bangkok prices for the comparable grade fetching Rs.178.68 a kg on Monday.
The projected Indian output of natural rubber for 2010 is 8.93 lakh tonnes, denoting an increase of 7.4 per cent from the previous year. Consumption is expected to reach a whopping 9.78 lakh tonnes, registering an increase of 5 per cent during the period.