Natural rubber prices climb further to Rs 220/kg

Prices of natural rubber, key raw material for making tyres, in the domestic market rose to a fresh high of Rs 220 per kg following firm global cues.

The prices of natural rubber in the markets of Kottayam and Kochi, key trading centres of the commodity, closed at Rs 220 a kg compared to Rs 219.5 a kg yesterday.

According to industry sources, the rally in natural rubber prices is due to the surge in prices of the commodity in the international market. 

Natural rubber prices in the global market touched a fresh high of Rs 247.3 per kg as strong demand from China and the US is fuelling the prices of commodity.

"International prices are at record high levels and are likely to remain at that levels in near future due to strong demand. Domestic prices are following the international trend," Indian Rubber Dealers Federation Treasurer Ibrahim Jalal has said.

A surge in demand from the US on the back of better-than-expected growth in the automotive segment is further pushing the global prices of the commodity and the impact is also felt on the domestic markets, said an expert.  

Natural rubber prices have been on the rise for the past few months due to disruption of production in Kerala, which accounts for 90 per cent of the country's production, coupled with rally in international prices of the commodity. 

However, the present rally in the prices of commodity is due to the global cues as the supply situation in the country has improved, Jalal said.

India's production of natural rubber in 2010 is estimated at around 8.5 lakh tonnes, whereas the total demand for natural rubber in the country is nearly 10 lakh tonnes per annum.