No bounce at 2012’s first Colombo rubber auction

By Cheranka Mendis

The first weekly rubber auction ended yesterday on a sombre note, with low prices offered for the grades presented at the auction compared to the previous year.

Prices quoted have come down almost by half across all grades compared to the prices quoted in January last year, Colombo Rubber Traders’ Association (CRTA) Chairman M.S. Rahim said.

Crepe Rubber 1x was sold at an average price of Rs. 340 yesterday, the first sale after two auction sales of unquoted prices. “A few lots were sold at the auction,” Rahim said.

SCR 1X was sold at Rs. 321 per kg, Skim Crepe for Rs. 302 while RSS1 went for Rs. 369. At Tuesday’s auction – first for the year, Crepe Rubber 1X and 1 were not quoted as brokers were not willing to sell for the prices offered. Uncertainty now prevails in the local market as prices keep dropping at each consecutive sale. In January 2011 where the year started with high prices, Crepe Rubber 1X went for Rs. 621, SCR 1X for Rs. 538, Skim Crepe for Rs. 491 and RSS 1 for Rs. 592. Comparatively the drop in the prices since a year back is evident. Prices in the market have seen a drop since September last year while the biggest drop came in October where the prices plunged to the Rs. 400 range. Since then the market has steadily progressed on a downward trend to reach the Rs. 300 price range at present.“Prospects for quarter one seem very slow,” Rahim said. “It is running slow due to the holiday period that exists in the world market.”

Drawing examples, he expressed that the Tokyo market opened only yesterday after all festivities. He also noted that due to the same reason, the market cannot expect high prices.

“The outlook for prices this year remains gloomy. Countries that have produced more rubber than last year will have to organise for a possible cutback in production to prevent prices dropping further.” The market outlook will depend on the global economic situation, which is presently austere.   The first weekly auction for the year ended yesterday with 124,815 kgs of Crepe, 14,400 kgs of SCR, 10,480 kgs of Skim and 18,290 kgs of RSS being offered at the auction.