The erratic rainfall in major natural rubber (NR) growing areas is affecting tapping, affecting production since the last seven-eight weeks. If the rain continues for a couple of more weeks, the price of benchmark grade RSS-4 may cross Rs 200-a-kg mark. The price was Rs 192 a kg today, both in Kochi and Kottayam.
According to growers and dealers, production in October would be around 85,000 tonnes as against 88,775 tonnes in the same month last year.
Market experts indicate the price will touch the Rs 200-a-kg mark in a couple of weeks. This also depends on the trend in the global rubber market. The Bangkok market today quoted Rs 179 a Kg and is poised for a further increase. This will also have an impact on the domestic trading of the commodity. The domestic market is currently facing a serious supply crunch as farmers are not in favour of immediate release of the stock. They are waiting for the price to cross Rs 200. Interestingly, the average price quoted in November 2009 was Rs 113 and it was just Rs 76 in 2008. The price has increased 250 per cent since November 2008 benefiting the one-million-plus growers of Kerala and Tamil Nadu.
Meanwhile, according to the current production trend, output will be lower during the peak production season (October-December) this year. If rain continues in November also, the production and supply will be affected to a large extent. Around 45 per cent of the total yearly production happens in the winter season. A total of 283,125 tonnes were produced during October-December last year.
According to leading traders, if the market is not touching the Rs 200 mark this month it might be delayed further by three-four months.