Rubber prices to remain firm

Higher exports, farmers' reluctance to sell produce stoke bullish sentiment.

Natural rubber prices will remain at higher levels on overseas sales and growers' reluctance to sell their produce anticipating better prices in the future. On Monday, the benchmark grade RSS-4 was quoting at Rs 101 a kg.

The prices in the global market are higher by almost Rs 13 a kg, giving a boost to exports. According to a leading rubber dealer in Kottayam, around 10,000 tonnes of rubber will be exported during February and March, leading to a drop in stock more than what was projected by the Rubber Board earlier.

With exports being done in good volumes and farmers are in no mood to part away with their stock, the markets in Kochi and Kottayam, the leading centres of rubber trade, are short of the commodity.

As on February 22, total exports stood at 39,500 tonnes, 10,000 tonnes more than on January 31 (29,674 tonnes). The board has estimated a total exports of 50,000 tonnes for the current financial year.

This is for the first time in 2008 the prices of RSS-4 have crossed Rs 100. In 2007, the prices reached the peak at Rs 100.75 on February 5.

George Vally, president, Indian Rubber Dealers Federation (IRDF), said the Rubber Board's estimate of a total stock of 225,942 tonnes as on January 31 was not in line with the actual position in the domestic market and that the stock would be below 150,000 tonnes.

Meanwhile, the production in February and March will be low due to extreme heat conditions. Rubber Board has projected an output of 52,500 tonnes in February and 47,000 tonnes in March, taking the total annual figure to 830,000 tonnes, marginally lower than the last financial year.

Tapping of plantations have been stopped in some areas because of low-yield, but showers in some areas have enabled growers to continue with tapping. The loss in production can be minimised to 1-2 per cent against the earlier estimation of 3 per cent.