Domestic price of rubber stayed firmly flat in the first week of January, refusing to catch the New Year buoy. Spot rubber was sold at Rs 131 per kg for the premium grade RSS 4, unchanged from the previous days. The Christmas season surge in global NR ( natural rubber) demand had pushed a slow pick up in domestic NR price, across the month.
From Rs 126 per kg in mid-November, the domestic price of the premium grade RSS-4 sheet, used in tyre production, has inched up a tad, to Rs 132 per kg in mid-December. In November first week, following the outbreak of Pestalotiopsis disease in the rubber plantations in top three NR producing countries like Thailand, Indonesia and Malaysia, domestic price of rubber in India had moved by 7% to Rs 111 per kg.
However, January did not bring the expected price rally. In the first week of 2020, NR transactions were on low key, trading sources told FE. Trends will be more evident only by next week, according to them.
At the spot trading, domestic price of RSS-5 grade fell marginally from Rs 127 per kg to Rs 126 per kg, while ISNR 20 grade sheet gained slightly from Rs 113 per kg to Rs 113.50 per kg. The price of latex (60% dry rubber content) was static at Rs 84.50 per kg. At the same time, futures have been a tint rosy in prices at ICEX (Indian Commodity Exchange).
January contracts perked up to Rs 133.02 per kg from Rs 132.9 per kg and the February contract crawled up from Rs 134.47 per kg to Rs 134.5 per kg.
Besides the slowdown in the inflow of rubber from Thailand, Indonesia and Malaysia, what arrested the further fall of domestic rubber price was the possible surge in benchmark rubber contracts from Tocom (Tokyo Commodity Exchange), said N Radhakrishnan, a rubber trader.
Meanwhile, with only two-thirds of the Indian rubber plantations, actively tapped, there is a 35% supply crunch and subsequent demand for sheets from stockists. This situation bears happy portents. According to Josekutty Antony, President, Rubber Nursery Owners Association, farmers are bullish that the prices would start their climb-up from next week.