Rubber hits a new high

Prices of RSS-4 grade rubber touched a record high yesterday at Rs 65.50 and closed today at Rs 65 due to short supply and increased export demand.

Monsoons has badly hit the tapping of latex and sheet rubber processing and turned the market into sellers' paradise for.

Traders said the price increase in the world market helped the bullish trend and they anticipated increased export in the coming months. Spot price at Bangkok market had increased to the level of Rs 71 a kg.

The marked difference in Indian and global prices attracts importers to India.

Export traders said that in last week total demand was to the tune of 3000 tonne and orders for another 3000 tonne is expected this week.

Total export will be more than 10,000 tonne in July while 22,000 tonne were the export in the first quarter of 2005 - 06. But the availability of export quality sheet rubber is the major hurdle, they added. It is very difficult to process sheet rubber due to bad weather condition in the producing centres. Incidentally sheet rubber is the most wanted item in the export front.

Though market sources project a price line which touches Rs 70, the change in the climatic conditions for the last few days may decide the course of action in the natural rubber market. Monsoon is weak for the last 3-4 days and hectic production is expected in the coming days.

Bullish market may attract more production which may affect the market in the other way. RSS-5 attracted a price of Rs 60 and ISNR-20 which has poor demand was traded at Rs 58.50.

It is also reported short in supply is a major concern in the markets world over due to monsoon and various other reasons.

Demand for natural rubber is on the increase which caused hectic activity in the futures market too. The global situation is a concern for Indian manufacturers especially tyre manufacturers because it is not at all a viable exercise to import rubber even in the advance license scheme.