Excl: Tyre firms plan more price hikes

 

Rs/Kg

Jan-0555.50 Aug-0558.00 Oct-0566.60 Nov-0565.15 Dec-0571.00 Jan-0679.00 Feb-06 *82.00 * last closing price  Manufacturers said the impact on the bottom line would be minimum, despite the increase in the price of natural rubber (RSS-4), thanks to the regular price hike in the replacement market for tyres, and also four rounds of price hikes, adding to 15%, in the last 13 months. The most recent price increase of 1.5-2% was announced at the start of this month.  "Price of rubber is not as much a concern as the availability of rubber itself. Due to heavy showers in Kerala during the peak tapping season (November to January), we estimate production to decline by at least 10%. The prices continue to increase even as we enter the lean season, which means that it is unlikely to come down in the near future," Paras Chowdary, president of All India Tyre Manufacturers Association, said. 
 

Futures
Mar-06	88.20
Apr-06	88.25
May-06	89.25
(source Multi Commodity Exchange of India)

 According to Alex K Mathew, senior research analyst at Geojit Financial Services, part of the pressure on price was due to heavy buying by China in the international markets.  "In the last 120 days, the price of rubber has moved up from Rs 55 per kg to Rs 82 now, which is still lower than Rs 88 per kg in the intenational markets. Traders are more keen to export," Chowdary added. "The bottomline of tyre companies will not be affected. Apart from the demand for tyres in the local market, the export market is also turning out to be very lucrative - both in terms of price and bottomline," A K Kinra, finance director of J K Industries, said.  He added that in the last two years, domestic prices have moved up by 12% while it has increased by 20% in the export market.