India: Natural rubber prices bounce back, growers see green shoots | DZHI - DZH International 

India: Natural rubber prices bounce back, growers see green shoots

  • i2Matrix
  • 16 May 2019
Disproving doomsayers, price of natural rubber (NR) has caught a bounceback trend that is sending the growers back 
to rubber sapling replanting turf. Price of premium grade Ribbed Smoked Sheet (RSS-4) has surged to Rs 134 per 
kilo from Rs 128 per kilo, a month ago. 
“Even as May falls in the lean season for NR production, there is a tangible spiral of demand from domestic stockists. Rosier price prospects may jack up the rubber production in the next year’s peak season,” Sibi Monipally, secretary, Indian Rubber Growers Association, told FE. 
If the trend continues, the farmers anticipate the premium sheet price to cross `142 per kilo by mid-June. 
Earlier, due to poor price realisation, small holding farmers had even been abandoning tapping operations on their rubber trees. 
Futures also reflect this increased NR appetite. The May contract of NR, in the Indian Commodity Exchange (ICEX) touched `13,644 per 100 kg, which is the highest in the last seven months. 
The October contract of NR on Tokyo Exchange (TOCOM) too had rose a tad. 
Consuming industry had seen the drop in Indian NR production, with growing alarm. From 9 lakh tonne in 2008-2009, India’s NR production has shrunk, by nearly one-third, to 6.42 lakh tonne, in 2018-19. 
Year-to-year, NR output had fallen 5.8%. “Nearly 48% dependency on NR imports is indeed no good news for rubber based industries,” according to Rajiv Budhraja, Director General, Automotive Tyre Manufacturers Association. 
Rubber Board, meanwhile, targets to raise domestic production to nine lakh tonne in 2019-2020. 
Besides better prices, what is needed is a policy framework to nudge the rubber grower to timely replacing of old and ailing trees with new disease-resistant varieties. 
“We are working on a package of production incentives, that would win back the confidence of the small farmers, who are the majority in rubber sector”, said KN Raghavan, Executive Director, Rubber Board. 
-- Financial Express 
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Benny Lee

Founder of i2Matrix. A market strategist, private trader and sought-after financial speaker and trainer in the Asian Region, Benny Lee has coached hundreds of professional and retails traders and investors in Malaysia, Singapore, Hong Kong, Thailand, Vietnam, Pakistan for more than 13 years. His passion in trading and chart analysis leads him to develop trading strategies that have helped him and many others to trade and invest successfully in the financial markets.

Benny Lee is recognized by the Malaysian and Singapore Stock Exchange as a Credible Trainer. He has also trained professionals in Malaysia under Securities Commission’s Continuous Professional Education (CPE) Program. He is also a market strategist Jupiter Securities Sdn Bhd, a Malaysian stock-broking firm.

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