The price of rubber today touched a new record high of Rs 173.50 per kg, mainly on account of high demand and tight supply.
"It is a new record. Heavy rains have affected rubber tapping and there is strong demand simultaneously from the domestic tyre industry," Rubber Dealers Association President George Valy said.
Also, growers are hoarding rubber as they expect prices to touch Rs 180 per kg, he noted, adding, "I will not be surprised if rubber quotes at Rs 175-176 a kg in a couple of days." Valy said that growers could be holding on to 1.5 lakh tonnes of stocks as of now.
In addition to these factors, Cochin Rubber Merchants Association President N Radhakrishnan also attributed the movement in futures prices to the continuous rise in wholesale rates over the last five days.
On the National Multi-Commodity Exchange (NMCE), the July futures contract for the commodity reached a high of Rs 174.87 a kg before closing at Rs 172.41 per kg.
The price of natural rubber (RSS-4 variety) had stabilised at Rs 168-170.5 a kg only by the beginning of the month and remained within that range until June 19, after which it started rising steadily.
Over the last two months, rubber rates had been fluctuating between Rs 172 (the last all-time high level) and Rs 149 a kg. Natural rubber production increased by 2 per cent to 54,600 tonnes in May, compared to 53,550 tonnes in the same month last year.
The Rubber Board has projected an output of 8.93 lakh tonnes for the 2010-11 fiscal, 7.4 per cent higher than 8.31 lakh tonnes in FY10.
