Financial Daily from THE HINDU group of publications
Monday, Oct 27, 2003
Financial Daily from THE HINDU group of publications Monday, Oct 27, 2003 |
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Agri-Biz & Commodities
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Rubber Rubber market at its bullish best Aravindan
Kottayam , Oct. 26 THE rubber market opened on a firm note on Monday as the world market continued to send strong buy signals both fundamentally and technically. Traders were absorbing the arrivals expecting better rates ahead. The export buyers and the covering groups were also active in the market. On Tuesday, rates moved up sharply reacting to the all round buying. As tapping remained almost freezed due to overnight rains, the expected improvement in arrivals failed to materialise even in the second half of October. The widening gap between the demand and supply positions kept the rates firm though mild selling pressure and buyer resistance put pressure on the prices on Thursday. The market bounced back on Friday. Sheet rubber RSS 4 which opened at Rs 52.50 on Monday closed at its yearly high of Rs 56 on Friday. All the grades recorded handsome gains on improved demand. The growers ignored the rubber trees during the past three years since the prices were running at lower levels. The weak monsoon and high prices tempted majority of the growers to tap in the monsoon months without rest which harmed the trees further resulting in low productivity. NMCE rubber futures witnessed yet another rally over the week. The extreme bullishness of the market took prices above Rs 60.00 a kg, on Monday registering a record turnover of 4,876 tonnes. Short covering and fresh buying took prices to Rs 65 level on Tuesday. The much-awaited correction came in as the introduction of additional margin by the exchange hit the market on Wednesday. But the rates bounced back the very next day supported by strong fundamentals. The benchmark February contract, after peaking to its lifetime high of Rs 66.80 a kg closed at Rs 65.70 on Friday. The net open positions went down to 2,125 lots against 2361 lots as reported last week Thai USS 3 continued to explore new highs during the week. A technical correction in TOCOM pushed the prices to red on Wednesday. But the market recovered on Thursday as the prices surged ahead on a hectic buying. The Chinese Government has announced the issue of additional import licenses this year as the earlier quota of 8,50,000 tonnes imported has already been exhausted. Obviously, this would create a shopping spree further fuelling a rally. The depleting stocks and expensive imports might prompt the major manufacturers to buy from the domestic market as the scarcity of NR in the international market is yet another hurdle to them. The market seems to be more bullish than anyone could perceive. Fundamentals are strong and technicals point to an uptrend as the market indicator RSS 4 closed above the Rs 55-resistance level. The Southeast Asian markets would continue to drag the rubber prices until a perfect demand-supply equation is formed naturally.
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