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Vipin V. Nair

Kochi , Sept. 6

, REVERSING a downward spiral, natural rubber prices are once again rising and have crossed the Rs 60-a-kg mark, fuelled by surging international prices and shortage of the commodity in the local markets.

The ribbed smoked sheet (RSS) 4 grade on Tuesday touched Rs 61 a kg in Kochi, up from Rs 55 a kg a fortnight ago. Industry sources say prices could move up further by at least Rs 2 in the coming days.

"Exporters have become very active and they are ready to take rubber at Rs 62 a kg even today," a dealer said.

The price difference between international and Indian rubber has widened to over Rs 10 a kg, making exports attractive.

Domestic prices began their ascent on the heels of international rates. Monsoon has affected tapping in Malaysia and Thailand and thereby, limited supplies, even as demand for natural rubber is high from tyre makers and other consumers. This has led to rise in international prices.

A dealer said another reason that could have boosted the international rates was Hurricane Katrina, which has hit operations of New Orleans Port. At least, 8,000 tonnes of natural rubber stocks lying at the port have been affected by Katrina.

Also, the hurricane has delayed shipments, adding to panic buying in the international markets.

The industry sources estimate that over 3,500 tonnes of rubber would have been exported by August-end.

"Lots of orders are coming and by October 15,000 tonnes should be exported," they said.

Since the Government has withdrawn export subsidies in the current fiscal, international prices need to rule at a minimum Rs 5 a kg higher than domestic prices for viable exports.

Unexpected heavy rains in parts of Kerala, which produces over 90 per cent of country's natural rubber, is another reason that has pushed up prices.

The rains hadhampered tapping and now rubber shortage was palpable in the market, the sources said.

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