A panic-ridden natural rubber market on Monday collapsed further and became a buyer’s paradise. The market on Monday was even reluctant to quote the correct prices, being “driven by rumours from all over the world”.
The benchmark grade RSS-4 was traded in the range of Rs 102-103 per kg, while for long delivery the price was Rs 100 only.
On Saturday, Kottayam and Kochi markets closed at Rs 107.50. Big drop in prices in major overseas markets like Tokyo coupled with various reports on global economic crisis made the Indian market plummet for the last one week. According to leading traders, rubber mart is poised for further depreciation, thanks to main production season and the “minimum buying” attitude of the industrial users.
It is for the first time in the last seven months that the RSS-4 grade sheet rubber quoted at the Rs 100 level.
It is the heavy drop in crude oil price and the US and European economic slowdown that created panic in the rubber mart the world over. There are reports from the US that the sale of automobiles would drop by 30 per cent.
The current situation has created a panic selling spree in the Kottayam and Kochi markets as rumours spread in the market that there would be heavy crash in the coming days and price tags might be pulled down below the Rs 100 level. But growers are not ready to digest such a free-fall situation as they collected handsome amount during the last 5-6 months.
Depreciation in the price of crude oil is a major concern of the natural rubber mart as this in turn would cause a drop in the prices of synthetic rubber. The huge rise in the synthetic rubber prices during the last 12-16 months was a major reason for the sharp rise in the prices of natural rubber. There is an increase in the consumption of natural rubber owing to the high price of synthetic rubber, which is almost double the price of natural rubber.
The growers here are feeling jittery as the domestic rubber production will be at its peak during the October-January period, thanks to a favourable weather and active tapping of plantations.