Rubber loses grip, plummets to Rs 79

The natural rubber (NR) market is going through a bearish phase with the prices dropping below the Rs 80 mark. Local traders cite the crash in prices in the global markets, especially in Tokyo and Bangkok, as reason for the current slump in the domestic market.

The price of benchmark RSS-4 rubber quoted Rs 79.50 a kg on Tuesday. Prices of lot rubber and ISNR 20 dropped to Rs 77.50 a kg and and Rs 77 a kg respectively.

The prices have been on the decline in the past four months. On May 27, RSS-4 had quoted Rs 115 and had even gone up to Rs 118 for a short while.

Interestingly, the domestic market has recovered and the current prices are slightly above those of Tocom futures. Tocom quoted Rs 77 a kg for RSS-4 and its prices in the Bangkok spot market were in the range of Rs 78 to Rs 79. A few weeks ago, the domestic prices were lower by Rs 12 to Rs 15 a kg over those of the Tocom futures.

Meanwhile, with the main production season on the anvil and the output expected to rise, major rubber dealers here opined that the current bear phase may further strengthen.

Rubber Board estimates indicate that production would increase by 11,465 tonne during October-December "" the peak season for NR production "" to 282,500 tonne. By September-end alone, the output is expected to be 77,000 tonne. However, a section of the growers differs on the output.

They believe that heavy rains in the last few weeks have seriously affected tapping, leading to a slightly lower production in September.

Meanwhile, rubber stocks have dropped drastically, recording the lowest ever in recent times. Sources at Rubber Board said that the total stock as on August 31 was 50,000 tonne.

Traders opine that the stocks may drop to 45,000 tonne by the end of September.