Prices of natural rubber, key raw material for tyre making, today surged to a record Rs 209.50 per kg in the domestic markets on fall in arrivals and firm global cues.
"International prices of rubber are touching new highs and domestic prices are only following them," Indian Rubber Dealers Federation President George Vally said.
He said that prices are further expected to go up as there is still a difference of Rs 16 per kg between domestic and international prices.
"International prices of natural rubber are now ruling at around Rs 225.50 per kg while in the domestic it has only gone up to Rs 210 per kg, so naturally, farmers are also getting better prices," Vally said.
There is a decline in arrivals too as farmers are reluctant to sell their produce on expectations of further rise in prices.
Natural rubber prices in the futures market for February 15 delivery at the Multi Commodity Exchange also touched a high Rs 220 per kg before closing at Rs 218 per kg.
Meanwhile, prices of natural rubber in the markets of Kottayam and Kochi, key trading centres of the commodity, ruled at Rs 209.50 a kg compared to Rs 207.50 a kg yesterday.
The Rubber Dealers Federation has said that the commodity's prices in the domestic market can only decline in the event of cooling of international prices, which are also at record level.
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.
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.
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