Rubber spot prices seen firm on demand

Rubber spot prices may stay firm in the week ahead on steady demand as well as sellers holding back their stock, dealers said on Tuesday.

Rubber futures on the National Multi Commodity Exchange (NCDEX) are likely to remain volatile on speculative activity, they added.

Sellers are holding back their stock expecting a rise in export demand because of domestic prices staying weak by nearly Rs 12 a kg, compared with Asian markets, dealers said.

Chances of a rise in exports have brightened following the widening of the gap between domestic and Asian market rates, Rubber Board said in a statement on Saturday.

Benchmark RSS-4 grade is at Rs 94.25 a kg, while its equivalent RSS-3 in Bangkok sells at Rs 106.98, a dealer said.

The widening gap between domestic and international prices has paved the way for a rise in exports from India, he added.

According to Rubber Board's provisional estimate, exports touched 30,000 tonnes by January 31 and if the current trend persists for another 1-2 months, total exports may touch 45,000-50,000 tonnes by the end of March, dealers said.

Some dealers, however, are betting on rubber prices moving in narrow band of Re 1-Rs 2, either way, depending upon domestic demand.

RSS-4 grade is in the range of Rs 93-95 for more than a month, barring modest fluctuations, said N Radhakrishnan, president, Cochin Rubber Merchants' Association.

Rubber prices are likely to stay steady at these levels, he said.

RSS-3 grade in Bangkok rose 3.38 per cent to touch Rs 106.98 during the last one month, while its domestic equivalent, RSS-4, stayed at the level of Rs 93-95 a kg, he added.

RSS-4 grade at spot markets in Kottayam as well as Kochi was at 94.25 rupees per 1 kg on Monday, compared with 93.25 rupees a week ago.

Rubber futures on NMCE moved up slightly with the March contract rising to 9,690 rupees per 100 kg from to 9,417 rupees last week.