Natural rubber (NR) prices today fell by Rs six to Rs 216 per kg in the domestic market due to high volatility in the international physical markets and low inventories.
The rate of NR yesterday at the domestic physical market was Rs 222 per kg, according to the Rubber Board data.
"The prices of NR in domestic physical markets follow the international market trends, which have witnessed heavy fall," Indian Rubber Dealers Association President George Valy said.
The prices of NR at the Bangkok spot market witnessed a fall of almost Rs 15 to Rs 248.59 per kg today as against Rs 263.39 per kg yesterday.
"The prices in the international markets have been affected by high volatility in the future markets abroad and because of drop in demand from China, a major consumer of NR," Valy added.
Valy said as March is the last month of the financial year, business houses on account of year ending are keeping low inventories.
More From This Section
"The sharp fall in the NR rates since the last two days is because of speculation in the domestic as well as international future markets," Cochin Rubber Merchants Association Advisor N Radhakrishnan said.
Radhakrishnan said with tapping almost over, which indicates production is on the decline, the prices should actually go up but on the contrary there is a slide in the rates.
Automotive Tyre Manufacturers' Association Secretary General Rajiv Budhiraja, attributed the fall in the prices of NR to volatility in the future markets and slowdown in consumption in China.
"Prices have also been affected due to the financial year ending coming near as business houses during this time carry minimal stocks," Budhiraja added. This is the second major fall in the domestic spot prices of NR this month.
NR prices witnessed a fall of Rs 5 to Rs 222 per kg on March 8 as against Rs 227 per kg on March 7.