Rubber weak in line with Asian markets

Spot rubber may fall marginally in the week to Friday if rains recede in Kerala and prices ease in Tokyo, analysts said.

However, the fall will not be steep, as domestic and overseas supplies remain low. Benchmark ribbed smoked sheet-4 grade is likely to trade in a range of Rs 105-115 a kg, they said.

"We now see prices trading between a narrow range of Rs 115-105 a kg. Prices will largely move in line with key Asian markets and also depend on rains in Kerala," said Ketan Joshi, who trades on the Ahmedabad-based National Multi Commodity Exchange.

Rubber collection improves immediately after rains in Kerala, which accounts for 90 per cent of India's output. The crucial southwest monsoon hit six days ahead of schedule on May 26.

So far it has rained heavily in the state and if showers recede, collection will improve, leading to fall in prices, he said. Also, if the Tokyo market opens weak on Monday, prices will drop in India, he said.

Rubber prices had touched an all-time of Rs 115 a fortnight back, but have been falling since then. India spot rubber spot rubber trade was suspended today due to a strike in Kerala.

Though prices may fall in Tokyo on Monday, global rates would still be higher than India, Joshi said.

Since 2002, global rubber prices have been rising in Indonesia, Malaysia and Thailand, the top three producers globally.

Amid high prices, India's rubber stocks fell to about 75,000 tonne against the mandatory norm of 1,00,000 tonne, a Kochi-based trader said.

"If we have to maintain reasonable levels of rubber prices, we need to plant rubber trees on massive scale," Radhakrishanan said.

A large number of rubber trees here are more than 30-year-old and steps have not been taken for fresh planting, the trader from Kochi said.