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Wednesday, Dec 21, 2005


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Agri-Biz & Commodities - Rubber

Rubber prices top Rs 70/kg again

Vipin V. Nair

Kochi , Dec. 20

NATURAL rubber prices touched record levels for the third time this year as the RSS-4 grade reached Rs 70 a kg, making it one of the most remunerative periods for the country's million-plus growers.

On a year-on-year basis, the ribbed smoked sheet (RSS) - 4 grade is at least Rs 17 higher.

During December last year, the RSS-4 grade was ruling at Rs 50-54.50 a kg, according to the Rubber Board statistics.

Traders here say Indian rubber prices are riding on surging international prices. The matching RSS-3 grade quoted $1.70 a kg in Bangkok on Tuesday. Also, a prevailing unusual shortage of the commodity in the domestic market has jacked up the prices, they say.

"I have never seen such prices in December," said Mr N. Radhakrishnan, President of the Cochin Rubber Merchants Association.

The peak tapping season starts from October and lasts till the end of January. The weather in Kerala, which accounts for over 90 per cent of the country's total natural rubber output, is the most favourable during this period for higher latex yield.

Normally prices tend to fall when output increases, but this year the opposite has happened. Growers and traders say production has been lower than expected this year on account of widespread and untimely rains.

In the first half of 2005-06, natural rubber production grew by only 2 per cent. The rubber trade is sceptical about the Rubber Board's forecast of a 4 per cent production growth this fiscal, going by the current trends.

However, the Rubber Board and some traders believe production would pick up now, and that the targeted 7.80 lakh tonnes is possible to achieve.

"Over the past few days, tapping has been on full swing and production has really peaked," said Mr Radhakrishnan. "Production may touch 90,000 to 95,000 tonnes this month if this trend continues," he said.

Exports continue to surge: Exports of natural rubber from India is continuing to grow, taking advantage of the price disparity between Indian and international rubber. Recently, the Rubber Board scaled up its export target for the fiscal by 5,000 tonnes to 45,000 tonnes.

However, traders say exports would easily top 65,000 tonnes during 2005-06. They say that every month at least 7,000 tonnes of sheet and block rubber ad latex are being exported.

Traders say the targeted 45,000 tonnes would have already been achieved. By the end of November, exports stood at over 37,000 tonnes. China is the biggest buyer of Indian rubber.

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