Date:01/11/2005 URL: http://www.thehindubusinessline.com/2005/11/01/stories/2005110101101200.htm

Back Rubber prices likely to rule at Rs 60-65 a kg till mid-January

Vipin V. Nair

UP & FIRM: A worker drying rubber sheets at a processing unit's smoke house near Kochi. Steady prices yield good returns to the growers. A flare-up in the prices in the global market, rains in the growing areas and good demand have combined to keep the prices firm. — K.K. Mustafah

Kochi , Oct. 31

RUBBER prices continue to rule over Rs 65 a kg in spite of the onset of the peak tapping season.

The benchmark ribbed smoked sheet (RSS) - 4 grade on Monday moved up again to Rs 66.50 a kg from Rs 66 during the weekend.

Industry experts say that prices are likely to remain in the range of Rs 60 to 65 a kg at least till the middle of January.

A major factor that has spurred domestic prices is the flare up of natural rubber in the international markets. In Bangkok, the matching RSS-3 grade is about Rs 10 higher.

Earlier this month, rubber prices moved up to almost a record Rs 70 a kg in the domestic market. It has been ruling steady around Rs 65 a kg now.

"Last week's rains (in Kerala) affected tapping to some extent. So supplies were a bit restricted. This is also a factor that keeps rubber prices high," a trader said.

He said notwithstanding the high prices, demand for natural rubber was pretty good in the market. "Most of the tyre companies have a touch-and-go situation with their stocks. So they are all buying regardless of the price," he said.

Since the international prices are higher, tyre companies are not resorting to imports in a big way.

"For the peak season, the present prices are very high. But everybody is buying," the trader said.

The peak tapping season in Kerala, which accounts for 92 per cent of India's annual natural rubber production of 7.50 lakh tonnes, is during October to January.

Usually, prices tend to fall during the peak tapping season because of higher production. But this year, this is not the case.

Relatively lower prices in India have also led to exports picking up.

India has exported over 18,000 tonnes of natural rubber in the first half of the fiscal.

For the full year, the Rubber Board expects exports of 40,000 tonnes.

This has also kept the prices high in the domestic market.