Rubber prices head north

The price of RSS-4, the benchmark grade of rubber, rose to Rs 85 a kg by the close of trade in the domestic market on Thursday, Rs 3 higher than Wednesday's close.

The spot prices have been rising along with the futures prices due to a supply shortage as incessant rainfall and outbreak of diseases are keeping labourers away from work.

According to Kochi-based dealers, the stocks have dropped drastically. To compound the situation, many farmers remain reluctant to release stock as they expect the market to soon enter a bullish phase.

Workforce at rubber plantations has been dwindling over the last 3-4 months. Farmers however say the shortage of skilled labour has been acute for a longer period as the younger generations have been deserting in favour of other professions like medicine, management, engineering and para-medical services.

This has created a shortage of skilled workers for the last 5-6 years.

To added to the woes, the recent outbreak of diseases throughout the state, especially in districts such as Kottayam, Pathanamthitta and Idukki, has made the shortage more acute.

According to estimates by farmers, at least 40 per cent of the labourers have been absent from work in the last few weeks.

The casualties due to the diseases are more serious in rubber growing areas because of the rise in the mosquito population with the onset of the monsoon.

It takes at least 4-6 weeks to completely recover while the death toll is the highest in the plantation areas.

Dealers say that on an average, the monthly production has fallen to 45,000 tonnes from 55,000 tonne in May-July.

The supply has not ceased completely due to the carryover stock, which stood at 145,000 tonnes at the end of June. Dealers say the stock may have fallen to 120,000 tonnes.

As the main production season (October "� December) is on the anvil, a prolonged bull phase cannot be expected in the rubber market.