Rubber prices get a boost on crude spike

The natural rubber prices are once again on a bull run owing to the unnatural spurt in crude oil price. The seasonal production is slowly gaining momentum in Kerala.

According to traders oil price increase would naturally hit the production of synthetic rubber.

They said that European manufacturers especially automotive tyre makers use synthetic and natural rubber on 50: 50 ratio and crude oil price will obviously change this ratio in favour of natural rubber.

In Asian countries this ratio is 40:60 and this is mainly due to the sufficient availability of natural rubber.

This had caused a spurt in rubber prices in both TOCOM futures and spot prices in Bangkok. Price of RSS-3 grade in Bangkok market increased to Rs 70.50 a kg which was below Rs 65 during the last week of August.

The paradigm shift in the global market has also affected the domestic market. Price of RSS-4 has increased to Rs 58 on Friday from Rs 55 on 24 August.

Crumb rubber, which has increased demand in the export front moved to Rs 57 on Friday. Malabar variety ungraded sheet rubber has a price tag of Rs 53.50.

Traders said that India has advantage in export market as the price difference in the domestic and overseas markets had increased to Rs 12.

Export orders are pouring in now for sheet and crumb rubber, but production of sheet rubber with global quality standard is limited which is the major constraint to exploit the export potential.

As production picks up both growers and traders expect increased exports in the current fiscal.Total export in 2004-05 was 46,169 tonne.