The Hindu Business Line : High global prices buoy rubber market

RIDING on high international prices, natural rubber prices in the domestic market are currently ruling at their highest level compared with prices in the corresponding period of the previous years.

The benchmark ribbed, smoked sheet (RSS) 4 grade on Thursday closed at Rs 64 a kg. As against this, the same grade quoted Rs 52.25 a year ago and Rs 49.50 in 2003, statistics compiled by the Rubber Board shows.

Rubber prices were on a steady ascent last month, gaining as much as Rs 6 for a kg, whereas the same month in 2004 saw prices fluctuating.

Industry experts said the domestic prices moved up only because of the prevailing high international rates. Currently, the the matching RSS-3 grade in the international market costs Rs 12 more a kg.

Increasing demand from China, whose rubber crops were damaged by typhoon Damrey; record crude prices that pushed up cost of synthetic rubber prices and declining production in Thailand and Malaysia have contributed to the surge in international prices.

"It is estimated that at least 50,000 tonnes of rubber production in China would have got affected by typhoon Damrey," a dealer said. Even during the present holidays in China, agents are actively buying rubber for Chinese consumers, he said.

Continuing demand for Indian rubber from international markets is also pepping up local prices. Prof. K K Abraham of Pala Marketing Society (a co-operative), said enquiries were still coming from abroad for rubber.

"Our society has exported 1,000 tonnes of block rubber and 2,000 tonnes of sheet rubber so far," Prof. Abraham said, adding that China was the predominant buyer of sheet rubber.

Rubber exports in the first half of this fiscal is estimated to be over 18,000 tonnes, up by around 36 per cent from the same period last year.

Prices may slide

Industry experts are of the view that prices may come down in the coming days as tapping is in full swing in line with favourable climatic conditions in Kerala, which produces over 90 per cent of India's natural rubber.

"Now growers are having rubber and they will start offloading their stocks. This should reflect in prices," they said.

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