Rains may limit drop in NR prices in India
, ET Bureau|
Updated: Nov 02, 2017, 01.43 PM IST
Persistent rains in Kerala, the largest natural rubber producing state in the country, may limit the drop in domestic prices which have been tracking the downward trend in the global market.
The NR prices have fallen 5 % during the month to Rs 127 per kg in Indian market. Normally the prices show a tendency to drop during this time since it is the peak tapping season. " As a result of continuous rains, however, the tapping has not resumed fully and the arrivals have shrunk.
The current drop is mostly due to a price decline in the international market," said Vikas Agarwal, secretary of Cochin Rubber Merchants Association.
The global rubber sheet price was nearly Rs 24 lower at Rs 103.49 per kg on Tuesday. The block rubber which is usually imported by the Indian tyre industry is further down at Rs 89 per kg, which could prompt more imports.
The tenth edition of the annual rubber conference of Association of Natural Rubber Producing Countries (ANRPC) held in Vietnam last week deliberated on the current market trends and came to the conclusion that rubber is following the general trend in entire commodities and the decline is not connected to demand-supply fundamentals as the surplus for 2017 at 50,000 tonnes is too insignificant to make an impact in the world market.
The low prices are compelling people to sell latex instead of rubber sheets. " For making sheets they have to incur more costs. So it is viable for the small farmers to sell rubber as latex which fetches around Rs 106 per kg," said P M Thomas, a rubber grower based at Kottayam.
The growers are waiting for the implementation of the third phase of the price support scheme of the Kerala government, which assures them a price of Rs 150 per kg by paying them the difference between the market price and the support price.
Around 7000 new growers have registered in the scheme taking the total to 4.44 lakh. " We have started receiving the bills for sale of rubber in July and August which will be cleared by November 30," said an executive at Rubber Board. Till now an amount of Rs 790 crore has been disbursed under the scheme in the two phases to the growers.
"Once the rain abates, the rubber arrivals may increase which will pull down the prices. A rate of Rs 115 to 120 per kg is possible then," Thomas said.
The NR prices have fallen 5 % during the month to Rs 127 per kg in Indian market. Normally the prices show a tendency to drop during this time since it is the peak tapping season. " As a result of continuous rains, however, the tapping has not resumed fully and the arrivals have shrunk.
The current drop is mostly due to a price decline in the international market," said Vikas Agarwal, secretary of Cochin Rubber Merchants Association.
The global rubber sheet price was nearly Rs 24 lower at Rs 103.49 per kg on Tuesday. The block rubber which is usually imported by the Indian tyre industry is further down at Rs 89 per kg, which could prompt more imports.
The tenth edition of the annual rubber conference of Association of Natural Rubber Producing Countries (ANRPC) held in Vietnam last week deliberated on the current market trends and came to the conclusion that rubber is following the general trend in entire commodities and the decline is not connected to demand-supply fundamentals as the surplus for 2017 at 50,000 tonnes is too insignificant to make an impact in the world market.
The low prices are compelling people to sell latex instead of rubber sheets. " For making sheets they have to incur more costs. So it is viable for the small farmers to sell rubber as latex which fetches around Rs 106 per kg," said P M Thomas, a rubber grower based at Kottayam.
The growers are waiting for the implementation of the third phase of the price support scheme of the Kerala government, which assures them a price of Rs 150 per kg by paying them the difference between the market price and the support price.
Around 7000 new growers have registered in the scheme taking the total to 4.44 lakh. " We have started receiving the bills for sale of rubber in July and August which will be cleared by November 30," said an executive at Rubber Board. Till now an amount of Rs 790 crore has been disbursed under the scheme in the two phases to the growers.
"Once the rain abates, the rubber arrivals may increase which will pull down the prices. A rate of Rs 115 to 120 per kg is possible then," Thomas said.
