Rubber prices show a declining trend due to waning offtake

By Sajeev Nair | 02 Sep 2003

Mumbai: The prices of rubber on the Kerala's major bourse of Kottayam exhibited a declining trend during the week ended 29 August on a fall in offtake, mainly from tyre- and tube-makers in the state. But the arrivals strengthened during the week, contributing largely to the bourse's southward journey, say traders.

The bourse, which opened at Rs 48.75 on Monday, steadily dipped during the week and posted Rs 47.50 on Friday, losing Rs 1.25 in five days' time. The futures bourse in the state also exhibited a similar trend during the week, even though the prices on the bourse were more or less steady, they add.

The prices had skyrocketed during the past couple of weeks, due to an increase in offtake, which was thanks to the festive season in the country. The festive season began with Independence Day and Janmashtami, followed by Ganesh Chaturthi. And the Onam season has pushed the offtake to abnormal highs.

This coupled with the prices touching a zenith had made buyers wary, who later called for a need-based buying. However, buyers and planters expecting to cash in on the price rally were seen pushing in even their stocks. The increase in arrivals and the call for need-based buying pushed the prices southwards, the traders say.

Nevertheless, exporters were active during the past week, but with major buyers, the tyre- and tube-makers resorting to need-based buying, the offtake from the bourse took a beating. The arrivals of RSS-4, the key market indicator, took a slight beating by the fag end of the week.

Its supply had strengthened during the opening days of the week, with the prices ruling as high as Rs 48.75. Sheet rubber RSS-5 was the most sought-after variety during the week, as cover purchasing posted increased interests during the week.

Industrial rubber and other rubber products makers were also active during the week, which helped in arresting the fall of Latex 60% DRC and Ungraded prices. However, interests for block rubber ISNR 20 also waned during the week.

Forecast: The prices are expected to rise due to a fall in supplies from the major procuring areas, predict analysts. They, citing the state's meteorological department, say the areas should receive a good rainfall during the coming week. "This might affect tapping and processing activities, resulting in a fall in supplies during the coming week."