Traders see stable rubber rates at Rs 65

Natural rubber prices continued to be volatile on Tuesday as the market seemed reluctant to take a definite direction for the last few days. Price of RSS-4 has increased by Rs 1 per kg to Rs 67 here on Tuesday and RSS-5 grade quoted Rs 62 per kg.

Traders told Business Standard that the market might stabilise at the level of Rs 65 as production season has now become very active. They do no expect a huge crash in prices since global prices are pegged at higher levels and export market is rather buoyant.

They also said that a price line above Rs 70 is not at all commensurate with the real parameters of the market and is unrealistic. "The ideal price is Rs 65 for RSS-4 but the sustainability is the major concern now", they added.

Seasonal production will peak in November and December and 80,000 - 85,000 tonne production in each month is expected.

But ultimately natural rubber prices will be determined by the price movement in the global markets and the volume of exports in the coming months. It is also noteworthy that production season in Thailand and Indonesia has already begun and it will definitely influence the market during the third quarter.

But according to experts here there might be a drop in total production by 5-6 per cent in Thailand and Indonesia in the current fiscal.