Rubber pierces Rs 100 mark on global spurt

The buoyancy in the natural rubber market has strengthened further. The fundamentally strong market today witnessed a surge in prices of all grades of sheet rubber beyond the Rs 100-mark, for the first time in rubber trading.

Thus, the spot price of the benchmark grade, RSS-4, was pegged at Rs 112 a kg "� Rs 5 more than Thursday's price.

This is also the first time that the price of RSS-4 has increased by a margin of Rs 5 in a single trading day. RSS-4 has appreciated by Rs 12 a kg in just seven days as the market had touched the magic mark of Rs 100 on May 23.

RSS-5 grade was quoting in the Rs 105-106 range, while ISNR-20 (crumb rubber) moved up to Rs 101, today.

The city traders attributed the spurt in local rubber price tags to the surge in global prices. At Tocom today, RSS-3 grade was selling at Rs 124 a kg "� Rs 5 higher than Thursday's closing rate.

The spiralling up of prices in international markets has had its ripple effects in the domestic market, and market observers are now eyeing the level of Rs 125 in a short period.

Analysts said a strong resistance might be seen at the Rs 125 level, but both growers and traders dismissed the theory as they see a huge demand for natural rubber the world over.

Indicating a growth in the price levels in the coming months, the futures market quoted Rs 115.60 for the June, Rs 118 for the July and Rs 117 for the August contracts by noon today.

The traders said there might be better production during the monsoon, as growers are very serious about rain-guarding of trees. The future course of the market depends on the level of production during the June-September period.

Some traders shared the optimism that with production increasing, it might ease the pressure on the price line.

Initial harvesting trend indicated considerable drop in the production. But domestic trading today entirely depends on global markets and, according to growers, the market might not feel the heat if the domestic production increases during the monsoon.

The problem with the domestic markets, especially in Kochi and Kottayam, is the acute shortage of quality sheet rubber. As prices are escalating every day, supplies to terminal markets have been immensely curtailed.