India rubber seen steady; weak demand weighs

Thursday, 21 July 2011 00:00 - - {{hitsCtrl.values.hits}}

(Reuters): Natural rubber prices in India are likely to trade in a narrow range this week as thin arrivals due to a decline in tapping in top producer Kerala state is seen outweighing weak demand from tyre makers, said analysts and dealers on Tuesday.

“Arrivals have gone down due to rainfall. And demand is also weak. Tyre markers have cut buying in domestic market and raised imports,” said a member of the Indian Rubber Dealers Federation.

Tapping slows down in southern state of Kerala during the monsoon season.

India’s natural rubber imports in June jumped 60 percent on year to 19,118 tonnes as tyre makers raised overseas purchases to cash in on lower prices in other Asian countries.

The trend is likely to continue for a few more months as rubber is still expensive in the country.

On Tuesday, price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala closed down 100 rupees at 21,400 rupees per 100 kg. The benchmark August rubber contract on India’s National Multi-Commodity Exchange (NMCE) provisionally closed 0.8 percent higher at 21,505 rupees per 100 kg.

India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.

Key global natural rubber production was forecast at 9.96 million tonnes in 2011, slightly higher than a previous estimate of 9.94 million tonnes on an upward output revision by the second-largest producer Indonesia, industry group ANRPC said last month.

India’s production for the current financial year is estimated at 902,000 tonnes and consumption at 977,000 tonnes.