The price of RSS-4 had touched a previous high of Rs 118 on May 30, 2006, while the ungraded variety had quoted Rs 113 last month.
The global markets are moving in tandem with the domestic market with RSS-3 grade, equivalent to the Indian RSS-4, quoting at Rs 119.28 a kg in Bangkok on Wednesday. On May 30, 2006, Bangkok had quoted Rs 9 higher than the Indian tag at Rs 127.17.
Indicating a tight market for May and June, rubber futures on Wednesday quoted a maximum of Rs 122.99 for May and Rs 120.40 for June. But the peak level of July was Rs 116.45 and August at Rs 112.39.
Both rubber industry sources and Kottayam- and Kochi-based traders attributed the lower output in the last couple of months for the sharp uptrend in prices.
There is a huge upsurge in consumption of natural rubber across the world that has curtailed stocks to a large extent, creating a serious supply crunch.
George Valy, president, Indian Rubber Dealers Federation (IRDF) told Business Standard that the domestic market was facing a serious supply crunch as the current stock was below 100,000 tonnes.
Due to the extreme summer heat, yield of rubber trees has come down. However, tapping is in full swing due to high prices.
Soaring crude oil prices have caused an upsurge in the prices of synthetic rubber, which, in turn, has forced rubber-based industries to switch to NR.
A paradigm shift in the pricing pattern is expected with the onset of monsoons. The supply crunch is expected to continue till July as average production is projected to be only around 58,000 tonnes in May, June and July. The production estimate of 72,000 tonnes in August is expected to provide some relief.
