The Hindu Business Line : Rubber prices inch towards Rs 70 a kg

"If rains continue like this, there is a possibility that the price will cross Rs 70," said Prof K.K. Abraham, President of The Kerala State Co-operative Rubber Marketing Federation Ltd (RubberMark).

Price of the RSS-4 grade on July 10 was Rs 67.50 a kg, up from Rs 66.50 a kg on July 1. A month ago, on June 10, the same was traded at Rs 61 a kg.

In the futures' market, the RSS-4 grade touched a record a 73.70 a kg on Monday, before closing at Rs 72.20. August futures closed at Rs 64.76.

Experts say prices in the futures market often foretell what is in store for the spot market. This also marked a rare incident of rubber prices in the futures' market surpassing pepper spot prices.

Some of the traders say rubber stock, already ruling at its lowest in nine years, has dipped further as there are hardly any new arrivals. "I would say that stock level would by only around 60,000 tonnes now," said Mr N. Radhakrishnan, President of The Cochin Rubber Merchants Association.

Nevertheless, a Rubber Board official claimed that stock position may not be all that precarious in the market as growers have gone in for widespread rain guarding in view of the prevailing high prices.

"Though the rains continue, tapping has not been affected in a significant way. There has been so much rain guarding in plantations that these days there is a shortage of material (for rain guards)," the official said.

Stocks at the end of May were between 66,000 and 70,000, the lowest in nine years. The Rubber Board is yet to compile data for the month of June.

Faced with such acute shortage and high prices, tyre manufacturers, who consume 3.50 lakh tonnes of rubber a year - 52 per cent of India's total production - are planning to import more natural rubber this fiscal.

During the year, they would import 60,000 tonnes of rubber, which is 39 per cent higher than the 43,154 tonnes the industry imported last year.