Rubber prices likely to ease from October

MUMBAI: With tapping to resume this week in Kerala, rubber prices are expected to come down from October when natural rubber starts arriving in the market. The spot prices of RSS4 variety at Kottayam in Kerala has come down to Rs 89 per kg from Rs 91.50 the previous day.

Even the futures prices of rubber October contract at NMCE was down to Rs 87 per kg levels from previous Rs 88 per kg levels at 4.45 pm. Rubber October contract at MCX was also down by over 1%. Kottayam based rubber trader Bijosh P Thomas said tapping will start from Friday as weather is clear and rains have stopped while fresh rubber arrivals will start from first week of October. “From October onwards, rubber prices will come down by 60 paise to Re 1 per kg every day,” Mr Thomas said. Tapping should have started by first week of September but was delayed due to continuos rains.

Fresh arrivals during season time, that lasts for four month reach 1.25 lakh tonne per month and for four months the production will be 5 lakh tonne. During the lean months only 50,000 tonne of natural rubber arrives. Country is likely to produce approximately 8.8 lakh tonne of rubber against the previous year’s production of 8.6 lakh tonne with more area covered under tapping.

Globally also the rubber prices are subdued as tapping is expected to start in other rubber producing areas like Bangkok, Indonesia, Malaysia and thereafter arrivals will start in next 15 to 20 days. Currently the prices at Malaysia, Bangkok and TOCOM are low at Rs 87 per kg levels since their previous close. The natural rubber prices globally were down in anticipation of fresh arrivals while the TOCOM futures exchange prices are steady with support from the rising crude oil prices. Crude oil prices provide support to the synthetic rubber prices which scale up the natural rubber prices.

George Paul from Geojit Commodities also feels that prices may come down once fresh arrivals start. “If fresh arrivals start, market will consolidate to Rs 90 per kg levels which would be a strong resistance and thereafter the prices may move downwards,” Mr Paul said.