Tuesday, 18 February 2014

India Rubber prospects to improve on lower production, automotive industry demand

 
In view of the excise reduction in automobiles, major manufactuers have already announced reduction in prices ranging from Rs 5000 to Rs 50,000 which could boost sales.

KOTTAYAM/MUMBAI, INDIA (Commodity Online): 

Rubber prices climbed up in Indian spot and futures market as Kerala Government renewed its committment to provide support for rubber by continuing to procure the commodity at Rs 2 per kg above market prices and lower production data released by Rubber Board. Meanwhile, the lowering of excise duty for a variety of passenger cars could raise demand for automobiles from April to June period, increasing the demand for tyres, analysts said.

Spot rubber prices tracked by Rubber Board has risen from Rs 14200 per 100 kg for RSS$ grade in the beginning of February to Rs 15500 per 100 kg on February 18th.

NMCE rubber futures fell more than three per cent on Tuesday, almost erasing the previous gains, possibly on profit booking. Moreover, investors/traders are probably awaiting further details on the rubber procurement scheme proposed by the State Government. In the meantime, natural rubber in the overseas market is seen moving in thin ranges with mild positive bias after the recent bounce back. TOCOM rubber futures edged up on Wednesday and so were AFET and SHFE rubber futures. Gains in crude oil prices aided the sentiments, Geojit Comtrade said in a daily report. 

NMCE March contract have support at 15200, 15100, 15000, 14850, 14750, 14600. Ressistance 15500, 15650, 15820,16060, 16180, 16250 a, according to Geojit Comtrade.

According to Rubber Board,Production and consumption in India declined during April 2013 to January 2014 compared to a year ago. Production was 9.4 per cent lower on a year ago. Production in this period was provisionally estimated at 723,000 tonnes. The main reasons for the decline were excessive rains, leaf diseases and low prices. However, the area increased from 504,000 hectares in 2012-13 to 518,000 hectares in 2013-14."

In view of the excise reduction in automobiles, major manufactuers have already announced reduction in prices ranging from Rs 5000 to Rs 50,000 which could boost sales.

Global trends

International Rubber Study Group expects production of rubber to rise 3.4% to 12.1 mn tons and consumption to be 11.9 mn tons in 2014. In 2013, the corresponding figures were 11.7 mn tons and 11.3 mn tons.

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