The price of rubber today touched a record high of Rs 173.50 a kg, mainly on account of high demand and tight supply.
“It is a new record. Heavy rain has affected rubber tapping and there is simultaneously a strong demand from the domestic tyre industry,” Rubber Dealers Association President George Valy said.
He said that growers were hoarding rubber as they expected prices to touch Rs 180 a kg. “I will not be surprised if rubber quotes at Rs 175-176 a kg in a couple of days,” he added.
Valy said growers could be holding on to 150,000 tonnes stock as of now. In addition to these factors, Cochin Rubber Merchants Association President N Radhakrishnan attributed the movement in futures prices to the continuous rise in wholesale rates over the last five days.
On the National Multi-Commodity Exchange, the July futures contract for the commodity reached a high of Rs 174.87 a kg before closing at Rs 172.41 a kg. The price of natural rubber (RSS-4) had stabilised at Rs 168-170.5 a kg at the beginning of the month and remained within that range until June 19, after which it started rising steadily.
Over the last two months, rubber prices have been fluctuating between Rs 172 (the last all-time high level) and Rs 149 a kg. Natural rubber production increased by two per cent to 54,600 tonnes in May, compared to 53,550 tonnes in the same month last year.
The Rubber Board has projected an output of 893,000 tonnes for the financial year 2010-11, 7.4 per cent higher than 831,000 tonnes in financial year 2010.