Despite the tapping season coming to a close, the price of natural rubber prices in India has fallen nearly 5% due to weak demand.
The price of rubber sheet came down to 123.50 per kg on Thursday from 129 a kg last week. In the international market, it has slipped about 3% in this period and was trading at 107.81per kg on Thursday.
Traders said the narrowing down of price between the domestic and international market to 16 from 30 a few weeks ago is encouraging imports.
“Tyre makers are mostly going for imports with the drop in international prices and their purchases in Indian market have slackened,’’ said CP Krishnan, whole-time director at Geofin Comtrade. Block rubber prices are ruling at around 97 per kg in the global market now, which has facilitated more imports into India.
“Though the global indicators pointed to a rise, it did not happen. The futures prices in India were pushed down by the speculators,’’ said Biju John, a dealer based in Kottayam.
The tapping season, meanwhile, is coming to a close in India. Growers were hoping it would extend beyond January, but the yield has already started declining.
“Tapping could continue for one more week. Growers too seem to have lost interest after the prices fell,’’ said K J Samson, MD at Inditrade Derivatives & Commodities.
Intense tapping in December and January led to an increase in supply but the buying was sluggish, he added. The recent jump in crude oil prices and the decision by major producers to cut exports have failed to lift natural rubber prices.
After the International Tripartite Rubber Council, comprising the world’s three top natural rubber producers—Thailand, Indonesia and Malaysia— decided to cut exports by 3.5 lakh tonnes until March, prices had shown signs of an upturn, which was reversed a few days later.
“Though the stock in China has thinned, the country has not started buying in a big way. Perhaps the buying may revive after the Chinese new year, which could lift the prices,’’ Krishnan said.
Natural rubber production across the world rose 7% year-on-year to 13.2 mt in 2017, according to the Association of Natural Rubber Producing Countries.
Furthermore, growers were hoping tapping would extend beyond January, but the yield has already started declining.
(RJA)
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