The Hindu Business Line : Rubber prices on the rise again

Up and up
Rubber production in March is estimated to be around 43,000 tonnes.
Unexpected jump in exports also push up prices.
Natural rubber production is set to record a growth of 4.9 per cent over the previous year to 7.86 lakh tonnes.

Kochi , March 23

Natural rubber prices are again surging in the domestic market due to growing shortage of the commodity, showing signs of yet another price boom in the coming months.

Traders and Rubber Board officials expect prices to rise steadily and match international rates, at present dearer by about Rs 9 a kg, as production will not be adequate to meet the growing demand from consuming industries such as tyre markers.

"Prices in April will be higher and could touch Rs 85 or Rs 86 a kg," a trader, who does not want to be identified, said.

"I think they will stay up till mid-May."

Rubber production in March, during which tapping is nearly stopped as trees shed their leaves, is estimated to be around 43,000 tonnes.

Monthly consumption

The monthly average domestic consumption of rubber is 67,000 tonnes.

"Arrivals are very poor. Tyre firms are not actively buying now; otherwise prices would have crossed Rs 85 a kg," the trader said.

In Kerala, Production till August-September will be lower than the monthly consumption because of the summer, during April and May, and monsoon, in June.

Kerala's contribution

The State accounts for over 90 per cent of the country's natural rubber production.

A Rubber Board official said stocks are ruling low.

"Tyre production has grown by 9.3 per cent till January. The demand is really big," he said.

During April, he expects production to be around 53,000 tonnes, up from 48,500 tonnes in the same month a year ago.

All-time high

Rubber prices have been ruling at all-time high levels since the beginning of this year.

Powered by international prices and increasing demand, domestic rubber price had touched Rs 83, its highest ever in the domestic market.

Currently, the benchmark Ribbed Smoked Sheet (RSS) 4 is trading at Rs 81.50 a kg in Kochi. One of the reasons that pushed up rubber prices in the domestic market is the unexpected jump in exports.

As against initial targets of 40,000 tonnes exports, natural rubber exports till March 21 has touched 65,755 tonnes, the Rubber Board official said.

For the fiscal 2005-06, the country's natural rubber production is set to record a growth of 4.9 per cent over the previous year to 7.86 lakh tonnes.

Even this growth has not been adequate to meet the demand from tyre makers and other consuming industries, which pushed up prices.